HomeBusiness DigestUK Bank Linked to Mugabe Govt

UK Bank Linked to Mugabe Govt

A BRITISH bank that was run by Lord Mervyn Davies, the new British Trade and Investment Minister, has been accused by the Foreign Office of “propping up” President Robert Mugabe’s government.

Internal Whitehall emails show the concern at the Foreign Office about the involvement of Standard Chartered Bank in Zimbabwe.

Lord Davies of Abersoch was chief executive and then chairman of the bank until last month when he became a trade and investment minister. Standard Chartered is among a handful of foreign banks in Zimbabwe.

It employs 860 people and has 24 branches there.

However, an internal Foreign Office briefing document accuses Standard Chartered of diverting money to the Mugabe government.

The documents, released under the Freedom of Information Act, say that Standard Chartered had been “diverting” cash to the regime through a loans scheme.

The email, dated August 25, 2008, says: “Standard Chartered risk real reputational damage if seen as passing funds to the Government of Zimbabwe.

“Understand that Standard Chartered has been diverting money to (the Government) due to a legal obligation to do so.

But must realise the repercussions of giving money to those responsible for this crisis.”

The revelations are especially embarrassing for the Labour government because Lord Davies was chief executive of Standard Chartered between 2001 and November 2006, and the bank’s chairman from November 2006.

He stood down as chairman on January 14 when he became Trade and Investment Minister.

A spokesman for Standard Chartered confirmed that Lord Davies was aware of the company’s operations in Zimbabwe when he ran the bank.

The spokesman declined to comment on the claim that the bank was “propping up” the regime. He added: “We made a conscious decision to stay in the country where we have 860 staff.

“We concluded it was the right thing to do to look after our customers. In every country where we are operating we are required to deposit certain amounts of capital with the central banks.” — Telegraph.

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