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;
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.