IDC is set to assume total control of Olivine Industries after accepting an offer to buy AICO Africa’s 49 percent stake
Golden Sibanda Senior Business Reporter
Foreign-owned bank Standard Chartered Zimbabwe has ordered the Industrial Development Corporation to close its bank account with the institution next month as part of widespread Western-backed sanctions crusade to stifle its operations
The State-owned industrial giant said it was told by the British bank to close its account with the financial institution by the 17th of next month. It was not clear how much IDC has in deposit with the British bank.
IDC general manager and group chief executive Mr Mike Ndudzo said Western imposed sanctions had already resulted in interception of US$2,1 million meant for its subsidiary, Olivine, and a facility with the Afreximbank
“Because of sanctions, we have been told to close our account with Standard Chartered by February 17,” Mr Ndudzo said.
“We (also) had a facility with Afreximbank, but because of sanctions they said they can’t disburse.”
In terms of the Zimbabwe Democracy and Economic Recovery Act, the United States, a British ally, intercepts all payments to or from IDC using the Office of Foreign Assets Control in an attempt to collapse the economy.
When contacted for comment StanChart Zimbabwe head of corporate affairs Ms Lillian Hapanyengwi said as a policy the company does not comment on its clients or customers.
“As a matter of policy we do not comment on our clients or customers. We remain committed to the long-term interests of our staff and customers in Zimbabwe, and to continue to facilitate the development and growth of the economy.”
Mr Ndudzo said the local firm has had to use innovative ways to circumvent the hurdles and pointed out that the company cannot transact freely as OFAC has extended the net to non-US dollar based transactions.
He said the conglomerate is not allowed to freely transact because it is believed to be the one buttressing the domestic economy. “IDC is deemed to be the juggler of the economy and they think it must really be crushed.”
“We are under siege from (illegal Western) sanctions. We cannot pay our suppliers and neither can we receive payment from our customers, they cannot remit the money to us for goods we have supplied,” Mr Ndudzo said.
The US and European Union imposed illegal sanctions including travel bans and asset freezes on President Mugabe, Zanu-PF ministers and other individuals and corporates believed to have strong links with Government.
IDC was established in 1963 through an Act of Parliament to promote industrialisation for investment and economic growth.
It has built an investment portfolio with its core business in motor and transport, fertiliser and chemicals, cement, aluminium and base metal, agro-processing and glass products.
It also has interests in textiles, granite processing, packaging, insurance and real estate.
The EU earlier this year retained an asset freeze and travel ban on President Mugabe, but eased some of the decade-old illegal restrictions on Zimbabwe.
The majority of those on the US sanctions list still remain, including a travel ban and asset freeze on individuals and entities with links to the President.
The situation has made life difficult for the State enterprise at a time it requires huge amounts of capital to recapitalise its expansive industrial base.
While the company has commissioned evaluations of non-strategic investments it can dispose to raise funding, the units need to be revitalised first in order to fetch the right prices at a time they are subdued due to the liquidity crisis.
Meanwhile, IDC is set to assume total control of its 51 percent owned subsidiary, Olivine Industries, after accepting an offer for the balance of the shareholding, 49 percent from co-shareholder, AICO Africa Limited.
Mr Ndudzo yesterday said that Olivine will be merged with Surface Investments — IDC has a 26 percent stake in the oil producing joint venture with Indian investor Midex group.
This comes after the State-owned conglomerate identified a prospective investor who is willing to inject a huge amount of money into oil production and discussions are ongoing on the terms of the investment.
Earlier attempts to secure investors to inject fresh capital into Olivine had failed with a total of 78 potential buyers having been short-listed, but virtually all of them eventually decided against investing in the company.
Olivine requires US$25 million to recapitalise operations.