Gono urges ‘no panic’ as row over bank grab grows
UK BANK Standard Chartered has been caught up in the row between Zimbabwean Empowerment Minister Saviour Kasukuwere and reserve bank governor Gideon Gono over plans to seize majority stakes in foreign banks for locals.
Mr Gono took the unusual step yesterday of urging the bank’s clients not to panic, following a weekend statement from officials of the National Indigenisation and Economic Empowerment Board (NIEEB) urging individuals, companies and government departments not to deal with the bank.
“Standard Chartered Bank clients are advised to go about their business in a sober and normal manner because nothing of the sort which was announced by NIEEB officials is of any legal or practical effect,” said Mr Gono.
“Destabilising a large bank such as Standard Chartered has serious systemic consequences that can lead to unintended results which are the opposite to those we would have hoped to achieve,” he said.
Both Mr Kasukuwere and Mr Gono are said to be close to Zimbabwean President Robert Mugabe, whose Zanu (PF) party is pushing the indigenisation policy ahead of elections expected later this year.
The two top Mugabe officials have different views on the indigenisation policy and how it should be applied in the banking sector, with Mr Gono preferring compliance thresholds that are below 51%.
Economists in Zimbabwe said yesterday that Standard Chartered was being pressed to comply speedily with the indigenisation policy. They said the recent submission of a “workable” compliance plan by Barclays Zimbabwe had set the stage for officials to increase the pressure on the remaining banks — Stanbic Bank, Standard Chartered and MBCA — to comply.
“Standard Chartered is the next big bank and this is one way for the government to pressure the bank to follow Barclays and comply. It will then be easy to have the other banks, such as MBCA and Stanbic, comply,” said independent economic analyst Moses Moyo.
Banking sector executives, who requested not to be named, told Business Day yesterday that Standard Chartered’s meeting with
officials from the empowerment board today would likely yield progress in efforts to have the bank become fully compliant.
Zimbabwean government officials insist Standard Chartered has been blacklisted under section 5 of the Indigenisation Act, although Mr Kasukuwere has told Business Day that drastic action had not yet been taken against the bank. He said the notice by the board was an initial step, to warn and caution the bank against its alleged continued reluctance to comply with the contentious policy.
“We have not yet used section 5. It has drastic measures – we have just warned and cautioned Standard Chartered to make corrections,” he said.
Standard Chartered head of corporate affairs for Southern Africa Vicki Robinson insisted yesterday that the bank had not been blacklisted.
Mr Gono has promised Standard Chartered’s depositors in Zimbabwe that the bank would not be shut down. He said only the central bank had the authority to oversee the financial sector and therefore the empowerment board could not touch Standard Chartered’s banking licence.
Mr Gono’s statement was copied to Finance Minister Tendai Biti; to Mr Mugabe’s chief secretary, Misheck Sibanda; and to empowerment board chairman Mike Nyambuya.
Mr Gono has been backed by Mr Biti in advising the government not to force foreign banks to cede 51% of shares, saying this would destabilise the sector.
Last year, he warned that the country’s fragile economy could grind to a halt if the government rushed its seizure of majority stakes in foreign banks.
Mr Kasukuwere refused to comment on Mr Gono’s statement, saying he was responsible for the empowerment law “at a policy level”.
Standard Chartered has been accused by Zimbabwean officials of “just being arrogant”, with Mr Kasukuwere saying that shareholders “must be worried about the behaviour” of management.