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.