Zimbabwe targets Stanchart, mines

MINING houses Metallon Gold and Duration Gold as well as British-owned Standard Chartered Bank face renewed pressure to speedily cede 51% of shares in their Zimbabwean units to black Zimbabwean groups ahead of elections due later this year.

Government officials in Zimbabwe said at the weekend that the three companies would be kicked out of the country for failing to comply with indigenisation laws.

Standard Chartered is one of four foreign banks operating in Zimbabwe.

MINING houses Metallon Gold and Duration Gold, as well as British-owned Standard Chartered bank, face renewed pressure to speedily cede 51% of shares in their Zimbabwean units to black Zimbabweans ahead of elections expected later this year.

South African mining magnate Mzi Khumalo’s Metallon Gold operates five gold mines in Zimbabwe, while Duration Gold is a significant producer of the precious metal. Standard Chartered, one of four foreign banks in Zimbabwe — the others are Stanbic, Barclays and MBCA — is stable and firmly established there.

Government officials said at the weekend the three companies would be kicked out of Zimbabwe for failing to comply with the country’s indigenisation laws.

President Robert Mugabe and his Zanu (PF) party have been criticised for spearheading the empowerment policy, which investors and economists say threatens foreign direct investment. This is considered vital to efforts to turn around Zimbabwe’s economy.

“Persons, businesses and government departments dealing with these companies are by this statement given notice of the intention of government to shut down these businesses until such time that they comply with the law,” the National Indigenisation and Economic Empowerment Board said.

Economic analyst Jefferey Kasirori said the new directive to bar companies and individuals from dealing with Standard Chartered would cause panic among bankers and companies that do business with Metallon Gold and Duration Gold. “I believe the companies are committed to their operations in Zimbabwe but require more time to avoid making hasty decisions on a major issue that will have a significant impact on the structure of the companies,” Mr Kasirori said yesterday.

Sources at the empowerment ministry told Business Day yesterday that Tongaat Hulett also was on the list of companies that the government had deemed as unwilling to comply.

Zimbabwean Indigenisation and Economic Empowerment Minister Saviour Kasukuwere said the companies had been “classified under section 5” of the indigenisation law. The section deals with blacklisted firms. Mr Kasukuwere named Standard Chartered, Metallon Gold and Tongaat Hulett as blacklisted.

Standard Chartered’s Zimbabwean spokeswoman, Lillian Hapanyengwi, said only that the bank was continuously engaging the government.

“We cannot confirm or comment on our meeting schedules or interactions, including those with the government,” she told Business Day in e-mailed responses.

There was no immediate comment from Metallon Gold and Tongaat Hulett officials in Zimbabwe. Sugar producer Tongaat Hulett owns Zimbabwe Stock Exchange-listed Hippo Valley and Triangle Sugar. Sources have said the companies are under pressure to fully comply with the contentious policy.

The empowerment board said in its statement that Metallon Gold, Duration Gold and Standard Chartered would be shut down “until such time that they comply with the law”.

This follows an earlier announcement by Mr Kasukuwere that Barclays Zim- babwe had submitted a suitable compliance plan with which government officials were “not unhappy”, although it still needed to be “tightened up”.

Informed banking executives have told Business Day that it is highly likely that a variation below the 51% mandatory requirement has been considered for Barclays following a heated dispute between Mr Kasukuwere and fellow government officials over his efforts to force banks give away 51% of their shares.