Impeccable market sources said Kasukuwere recently wrote to Barclays Bank Zimbabwe stopping a planned sale of the bank’s custodial business accusing the financial institution of ignoring regulations compelling companies to draw up an empowerment plan.
A custodian bank is a specialised financial institution responsible for safeguarding a firm’s or individual’s financial assets and is not likely to engage in “traditional” commercial banking such as mortgage, personal lending, branch banking and personal accounts.
According to the indigenisation regulations, gazetted early this year, foreign-owned businesses must dispose of controlling stakes in companies valued at US$500 000 or above to indigenous Zimbabweans.
This week, Kasukuwere could neither confirm nor deny stopping the deal. Barclays Bank MD George Guvamatanga denied receiving a letter blocking the deal.
He said: “Barclays confirms that it submitted its application for the sale of its Custodial business to the Ministry of Youth, Development, Indigenisation and Empowerment, Hon. S Kasukuwere on 26 May 2010. We have not yet received a response to our application.”
But sources maintained that Kasukuwere had blocked the deal.
“The minister has stopped the sale arguing that the bank was yet to submit its empowerment plan as outlined in the indigenisation regulations,” one of the sources said. “The minister has since written to the bank blocking the deal.”
Barclays sought approval to sell its custodial business in May. This comes after Barclays Bank Plc, the local bank’s parent company, agreed to sell its custody business in Africa to Standard Chartered.
Barclays Africa custody business had gross assets of £1,9 million and assets under custody of £3,862 million as of last December. The business is a pan-African securities and custody operation which employs 66 people and covers 16 markets from its operations in Botswana, Ghana, Kenya, Mauritius, Tanzania, Uganda, Zambia and Zimbabwe.
Barclays exited the global custody business outside Africa in 1998. The remaining custody business in Africa is profitable, but would benefit from the synergies a global operation could provide, the bank said then.
The sale is expected to be completed in 2010, subject to regulatory approvals and other customary conditions.