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(NEWZIMBABWE, REUTERS) Indigenisation: Stan chart plan rejected

Indigenisation: Stan chart plan rejected
26/09/2011 00:00:00
by Reuters

THE government has rejected Standard Chartered's ownership plan for its Zimbabwean unit because it falls below the required 51 percent local stake, state media reported on Monday. Under a controversial "indigenisation" law, foreign firms operating in Zimbabwe are required to sell a majority of their local business to black Zimbabweans.

Empowerment Minister Saviour Kasukuwere told the state-controlled Herald newspaper that Standard Chartered had offered an "unacceptable" 10 percent of its operation to locals.

Standard Chartered's executive for the Africa region, Diana Layfield, met Kasukuwere last week and told him the bank wanted to retain majority control of its Zimbabwe unit, the newspaper said.

Kasukuwere in August gave Standard Chartered, Barclays and other foreign-owned firms, a two-week ultimatum to submit new ownership plans or risk losing their operating licences, a move that was sharply criticised by Zimbabwe's central bank.

Finance Minister Tendai Biti subsequently announced that talks between government and the banks would continue and the deadline passed without incident.

A similar September 30 deadline set by Kasukuwere for mining companies is also set to expire this week. So far, the government has yet to follow through on its threats to seize assets of firms that don't comply with the law.

Kasukuwere has softened his tone on the ownership drive in recent weeks, and has said talks are progressing well with some mining firms.
Insurer Old Mutual said last week it had reached an agreement with Zimbabwe over local ownership of its Zimbabwean unit.

Some analysts see the drive for local ownership as designed mainly to drum up votes ahead of elections next year that President Robert Mugabe's ZANU-PF party is desperate to win.

Zimbabwe's coalition government, set up two years ago by Mugabe and his rival Prime Minister Morgan Tsvangirai, is divided over the empowerment plans being driven by the president's party.

Tsvangirai has said the plan is undermining Zimbabwe's economy, which is recovering after a decade of recession in which it shrank by as much as 5o percent, according to official statistics.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), MORGAN TSVANGIRAI, SAVIOUR KASUKUWERE, STANCHART

posted by MrK @ 6:20 PM