RBZ says Barclays deal complies with indigenisation policy

RBZ says Barclays deal complies with indigenisation policy
Reserve Bank of Zimbabwe governor, John Mangudya

Reserve Bank of Zimbabwe governor, John Mangudya

ZIMBABWE’S central bank said Monday it is currently processing Barclays’ application to sell 68 percent of its shareholding in the Zimbabwe unit to Malawi-based First Merchant Bank.

The Reserve Bank of Zimbabwe Governor John Mangudya told a portfolio committee of parliament that the deal complied with the country’s indigenization policy, contrary to concerns raised in some quarters.

Zimbabwe’s indigenization policy stipulates that foreigners must own a maximum of 49 percent of shareholding in a company while the majority 51 percent is reserved for locals.

There had been concerns raised in some circles that the deal flouted the indigenization policy, with some urging President Robert Mugabe to reverse the deal.

Barclays staff in Zimbabwe was reportedly contesting the takeover, and had appealed to the country’s high court to block the transaction.

However, Mangudya said Barclays was in effect selling 43 percent of its shares in the Zimbabwe unit, which is below the 49 percent threshold for foreign investors.

He clarified that of the 68 percent being disposed of by Barclays, 32 percent would remain listed on the Zimbabwe Stock Exchange, 15 percent will be offered to employees and management while 10 percent would be retained by Barclays Plc for the next three years to ensure business continuity.

“When you look at it the shares that are actually being sold are 43 percent. This is below 49 percent reserved for foreigners,” Mangudya said.

Barclays’ disposal of the Zimbabwe unit, announced end of May, ends its 105-year presence in Zimbabwe.

Barclays first established a presence in Zimbabwe when it was still a British colony in 1912.

Barclays Bank Zimbabwe is listed on the Zimbabwe Stock Exchange and has a market capitalization of 73 million U.S. dollars.

The deal leaves Standard Chartered Bank as the only Western bank operating in Zimbabwe.

Barclays will transfer all of the bank’s 700 employees, 25 retail branches and five corporate service centers in Zimbabwe to First Merchant Bank.

Barclays has also cut its stake in its main African operation from 50 percent to 15 percent, selling control of the Johannesburg-listed business as it continues its exit from Africa. Xinhua

  • nelson moyo

    I can think of no good reason why Barclays has even stayed in Zimbabwe this long, let alone which it should be staying any longer. You’ve got a dangerous bankrupt Marxist regime that has destroyed the economy and living standards of the former “breadbasket of Africa” not least because it has pursued the lawful theft of productive assets, predictably justified rhetorically in terms of socialist ideology but in practice all about enriching and rewarding the regime’s tribal and factional supporters. This is not an environment in which any company accustomed to Western norms of secure title to private property and reliable contracts should be trying to do business.

  • nelson moyo

    Certainly hope Barclays Zimbabwe does the right thing by its pensioners as its exits the failed state .

    Many years of ducking and diving by Barclays Zimbabwe in order for the parent to not have to help its subsidiary to pay reasonable pensions to its long suffering and loyal employees left some former employees of 40 years service receiving a pension of US$ 30 p month.

    Barclays Zimbabwe has over decades not had an arms length transaction between itself and its pension fund – one example – the buildings it uses to conduct its banking operations. The pension fund owns the land and buildings and rents them to Barclays Zimbabwe. Trustees of the pension fund are of course employees and cowed into agreeing easy terms for the bank – thus hurting the pension fund. Tame actuaries always seem to find in the banks favour and insist all is well.

    So final result – work your entire life for Barclays Zimbabwe – 40 years – and receive US$ 30 p month.This example is of some senior people retired from the bank.Folks who worked less than 40 years are already in the very poor house !

    How do we reconcile this fine piece said by James Staley – CEO – of Barclays about itself :- ” I want Barclays to be a bank where our employees choose to work here because they believe in the institution, and its intrinsically valuable role in society. This is a mind-set I want to reinvigorate in everyone, from branch colleagues working on the high street in Manchester, to the M&A banker in New York.”

    Why would anyone in Africa feel sad for Barclays PLC as the curtain comes down on its African safari as it has acted in such a heartless manner, in this small and once dynamic country, towards its faithful employees

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