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Zimbabwe rejects Stanchart equity proposal

HARARE, Sept 26 – Zimbabwe has rejected Standard Chartered Bank’s offer to cede 10 percent of its shares to local blacks under a new law requiring foreign firms to sell majority stakes, a state daily reported Monday.

“The law is clear. It’s 51 percent to indigenous people, not the 10 percent they are talking about,” The Herald newspaper quoted Indigenisation Minister Saviour Kasukuwere as saying.

“Their plan is unacceptable.”

The newspaper quoted an unnamed source in the ministry as saying the bank wanted to retain its majority shareholding.

“They are arguing that it is in the best interests of Zimbabwe for Standard Chartered Plc to remain in control,” the source told the paper.

The bank’s spokeswoman said negotiations with the government were ongoing but would not give details.

“Our plans are commercially confidential and we are not in a position to comment on the details,” Lillian Hapanyengwi was quoted as saying.

Kasukuwere said Zimbabwe will decide on Monday the fate of foreign firms that missed a September 25 deadline to map out how they will transfer majority stakes to local blacks. Companies have until 2015 to actually transfer the shares.

He would not say how many companies were affected. He had earlier warned that non-compliant companies risk nationalisation.

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The law has caused anxiety among foreign investors and division in Zimbabwe’s power-sharing government between President Robert Mugabe and his long-time rival Prime Minister Morgan Tsvangirai.

Zimbabwe has given the platinum-mining giant Zimplats more time to meet the requirements of the law and reached an agreement with Old Mutual allowing the British insurer to conduct a “first phase” of compliance which will see the firm place 25 percent of its local subsidiary in the hands of black Zimbabweans.

The minister says the law aims to fight poverty and put control of the economy in local hands.

The project has been called the final phase of “economic emancipation” following controversial land reforms targeting white-owned farms a decade ago that involved often violent takeovers.

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