Chinamasa allays bank equity grab fears

via Chinamasa allays bank equity grab fears 22/04/2014 NewZimbabwe

TALK suggesting Zimbabwe’s government wants to acquire controlling stakes in foreign owned banks is nonsense, Finance and Economic Development Minister, Patrick Chinamasa said yesterday.

Chinamasa told a press briefing at which he revealed a $20 million investment into the Kingdom Afrasia Bank by Mauritius based Afrasia Bank Limited that it was not the wish of government to use the “one-size-fits-all” policy as part of the indigenisation plan.

“I have indicated in private discussions with investors that what is sometimes peddled that you bring in your $20 million and we take 51% of that is nonsense and let it go out that it is nonsense,” said the treasury chief.

He said the government’s aim was to encourage local participation through incremental gains.

“We have never said it and we will not do it. What we have said is that we want to encourage local participation and they will do it on the basis of a given framework and they will pick their own local partner and decide the price.

“That is one area that needs to be emphasised over and over again. We are not going to get 51% of anyone’s money, it is not the policy of this government,” Chinamasa said.

The Finance Minister said government was now working on a policy framework that will clearly spell out the indigenisation thresholds for the economy’s different sectors.

He said the $20 million injection which will be translated to equity will result in the Mauritian banking group acquiring a 62.5% controlling stake in the former Kingdom Bank up from 32% against a legal threshold of 49%. Chinamasa said he was aware of the situation but was happy because locals do not have the money to buy the equity.

“We are aware of what the law requires and the dilution that will come with this investment but there will be incremental gains as we go until the thresholds are met,” said Chinamasa.

ABL Mauritius group Chief Executive Officer James Benoit said the bank, despite now owning a controlling stake, will help local investors eventually take charge.

“We do not have a policy of having majority control, we have a partnership approach and once we get through this transition period, we will have more local investors come on board and inject and increase the share capital.

“So far including investments in continuance what we have invested is fast approaching a sum of $30 million,” said Benoit.

Chinamasa’s remarks, while they resonate with President Robert Mugabe’s comments at the weekend that there has been confusion over the implementation of the indigenisation policy, are likely to raffle a few feathers among hardline elements within Zanu PF, in particular former indigenisation minister Saviour Kasukuwere who last year was engaged in verbal battles with former Reserve Bank Governor Gideon Gono over takeover of foreign banks.


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    Jono Austin 10 years ago

    Of course they won’t take 51%-NOW. Just wait until the banks are up and rolling (if that is at all possible in Zimbabwe today) then they will shift the goalposts and grab 51% if not 100%. They realise that no one is investing under the 51/49 rule so they need to hoodwink the investor to get money in. Their track record speaks for itself. You can NEVER TRUST THEM. Their word means nothing. How many jobs did they promise the electorate?-not just in the recent elections but in elections past?

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    roving ambassador. 10 years ago

    Who is fooling who? Knowing Zanu ,one of the big wigs is already a silent shareholder.
    Some of us were not born yesterday. We have been under Zanu for 34 yrs and thats no joke.
    Fools never.

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    John Thomas 10 years ago

    Patrick Chinamasa you are among other undesirable things, a liar. Was there no responsible adult in your family to smack your bottom and wash your mouth out with soap when you told lies? In case it is not clear to you, lying is not considered acceptable between civilized people. It is in fact rude and insulting to tell lies. I hope this is a tip you will use to your benefit.

    As a matter of fact the 51% law has been used to threaten and extort quite a number of victims. There are cases that are in the public record and many others that are not. Your president (who by the way is not the legitimate president of Zimbabwe) is on the record as threatening all and sundry with this very law.

    If you wish to attract serous money into the country this law will have to be removed from the statute books and those who have been criminally extorted by yourself, your president and your friends compensated.

    Hope this advice is useful to you Patrick. I am, as always, happy to explain the error of your ways to you. You must be a really second rate lawyer if your argument in the article above is anything to go by.

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    jobolinko 10 years ago

    Hogwash, why was it not explained in the beginning , all we could hear was kasukuwere saying there is no going back ,so what has changed

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    oliver chikumba 10 years ago

    nxa these chameleon damn liers