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Old Mutual Zim issues vague statement addressing delisting allegations

There have been reports that Old Mutual Zimbabwe had been delisted from the ZSE because they were accused of being a big contributor in the economic turmoil we (Zimbabweans) find ourselves in at the moment.

The reports started a few days ago, when Patrick Chinamasa speaking in his capacity as ZANU-PF spokesperson endorsed the decision to delist Old Mutual on the basis that the company was fuelling “runaway inflation through illegal parallel exchange-market rates”.

Many people took Chinamasa at his word on Friday. This was not entirely surprising since Old Mutual had been mentioned [in negative light] in another government declaration two weeks ago when the Ministry of Information announced that the government was “banning mobile money“. In that statement, the following was said regarding Old Mutual;

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The impact [of illegal forex trading] is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which is epitomized by the so-called Old Mutual Implied Exchange Rate (OMIR). This, in turn, results in four or more US: ZWL parallel market exchange rates operating in the market.

Nick Mangwana – Permanent Secretary of Ministry of Information

Old Mutual has issued a rather confusing statement regarding the current situation and reports that have been flying around over the last 48 hours. The statement reads;

Old Mutual Statement to Customers

12 July 2020

We have noted reports in the media relating to the Old Mutual Group. We are working with all relevant stakeholders to seek clarity on the matter.

In line with the Group’s Responsible Business Policy, Old Mutual has and will always continue to comply with all regulations and legislation within the countries where it operates. As a part of the community, Old Mutual remains committed to serving its customers and to contributing to the development and growth of the economy.

We appreciate the support we get from our customers, our partners, the government and other stakeholders in industry.

We advise you that all our services and operations are continuing to run as normal. Old Mutual Zimbabwe Limited and its business units, including CABS, continue to be financially stable and sound. We will ensure to continue to update you of any significant developments on our official company platforms.

Old Mutual

The statement doesn’t seem to directly address whether or not Old Mutual was actually delisted or not but according to sources closer to the situation, Zimbabwe Stock Exchange is yet to be given an instruction to delist Old Mutual from the stock exchange.

If ZSE are to receive such an instruction at some point it would be naive and shocking of the government to go down that path. Why? Well because disincentivising people from investing in the stock market will only slow down economic activity – something you would expect the government understands isn’t a great idea.

It also lowers confidence in future projects i.e the National Venture Capital Fund and the Vic Falls Securities Exchange. Whether these are factors the government considers before making a decision is another thing altogether but the targeting of private businesses like EcoCash and Old Mutual is one of those things that show how far we’ve come from the “Zimbabwe is Open for Business” era.


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8 thoughts on “Old Mutual Zim issues vague statement addressing delisting allegations

    1. Never said Old Mutual has to “clarify its intentions”. The feeling though is that this statement doesn’t really help anyone. What do Old Mutual customers and investors take from this statement? Suggesting that Old Mutual cannot say much on speculation is something I disagree with because speculation and hearsay can impact their business BIG TIME – e.g potential investors waiting on investing or altogether deciding against investing because of the lack of clarity.

      1. Old mutual won’t suffer if they are delisted from the ZSE. Zimbabwe and its people will suffer. In addition the OMIR is not generated by old mutual, it is based on share prices prevailing in various countries.
        Since the ZWL has no real basis for it’s value people have to rely on speculation to determine its real value.
        Zimbabwe production accross most industries (if not all) is at 30 percent of capacity and 30 percent of what it was in the 1990s, according to a report published in 2016 by the Ministry of Agriculture. That is the biggest issue we need to address as a nation. Foreign investors will only come in when they see a concerted effort on the part of Zimbabwe, its people and its policy makers.
        Random attacks on the economy by confused policy makers is extraordinarily detrimental at this time

        1. I think saying they won’t suffer is an oversimplification but I do hear the point you’re trying to make that the general populace will suffer more. Why do you think that will be the case?

      2. My point was on making a definitive statement without facts which is more detrimental to any business, it’s the same as Ecocash after the supposed ban only for clarification to follow up the next day from the Govt. OML just like Ecocash would rather wait for the official position to be communicated only then do you make your move. If you read the statement to understand, you’ll see it’s in simple terms, they’re waiting to get an official position or intentions from the Govt then advise once clear. It really is that simple.

  1. Microsoft is a great company contributing immensely to the economies of Europe and America. The company was fined billions of USD for wrongful behaviour by authorities there. Wrongful behaviour cannot be condoned on the basis of contribution to an economy as in the case of Old Mutual and Zimbabwe. Those in real business understand this position.

    1. Fair enough. What has Old Mutual done?? And is ZANU-PF the authority that brings them to book when they’ve done something? Why is government issuing statements and not acting using the law???

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