Gono denies bank takeover

Gono denies bank takeover
Published: 10 June 2013
Central bank chief on Wednesday denied there were plans for a government takeover of the local operations of London-based Standard Chartered Bank, putting the central bank at odds with a powerful national economics board.

At the weekend, the National Indigenisation and Economic Empowerment Board (NIEEB) threatened a takeover of Standard Chartered in order to hand a majority stake to locals.

But Gideon Gono, the Governor of the Reserve Bank of Zimbabwe, dismissed the board's threat of seizure.

"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 Gono in a statement.

"Destabilizing a large bank such as Standard Chartered has serious systemic consequences that can lead to unintended results which are opposite to those that we would have hoped to achieve," he continued.

Gono said only the central bank had the authority to oversee the financial sector and therefore the NIEEB could not touch Standard Chartered's banking license.

The British bank is part of the FTSE 100 Index.

President Robert Mugabe's government in 2007 passed an "indigenisation" law, which would require foreign companies to hand over a 51 per cent stake to black Zimbabweans - a measure intended to make up for decades of white-minority rule and colonialism.

Some mining concerns have agreed to make such concessions, often under duress as the government threatened to shut their operations in Zimbabwe.

Saviour Kasukuwere, the powerful minister in charge of the so-called "indigenisation" programme, has warned banks this year that they must comply with the law or face consequences.

Gono is seen as a close ally of Mugabe, 89, and is among those blamed for Zimbabwe's runaway inflation last decade which left the country in tatters and forced the government to ditch the local currency and instead use a basket of foreign bills, including the US dollar.

- Sapa-dpa
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