Old Mutual seeks clarity on claimed “ejection” from Zim

Harare, (New Ziana) – Financial services giant, Old Mutual Zimbabwe said on Monday it was seeking “clarity” on its future after claims by a senior ruling party official that there had been a decision to “eject” the company out of Zimbabwe’s financial system.

The announcement, made by Zanu PF acting spokesperson Patrick Chinamasa following last Friday’s Politburo meeting, sent shockwaves in the financial market.

But it has still remained unclear what decision regarding the company was
made, and by who.

“The Politburo welcomed the decision to eject Old Mutual from the
financial system of this country and the closure of Ecocash agents who
had caused runway inflation through illegal parallel exchange market
rates,” Chinamasa said.

The diversified financial services giant, which has been in existence
for 175 years, is a major player in the financial market and is one of
largest institutional investors in the country.

But it has lately seen its relations with the government sour amid
allegations by authorities that the Old Mutual Implied Exchange
Rate (OMIR) was one of the instruments driving the devaluation of the
local currency.

OMIR is a gauge of the value of the Zimbabwe dollar which is based on
the difference in the value of the firm’s shares in London and Harare.

The OMIR at ZW$122.22 to the United States dollar, currently stands at
nearly double the official Zimbabwean exchange rate of ZW$65.87.

Other players in the market then use the OMIR to price their goods and
services as a true reflection of the value of the local currency.

Reacting to media reports following Chinamasa’s pronouncements, Old
Mutual said: “We are working with all relevant stakeholders to seek
clarity on the matter.”

“We advise you that all our services and operations are continuing as
normal. Old Mutual Zimbabwe Limited and its business unit including
CABS, continue to be financially stable and sound,” the insurance
giant said, adding it would update the market on “any significant
changes”.

The firm insisted that its operations comply with the law of the land.
“As part of the community, Old Mutual remains committed to serving its
customers and to contributing to the development and growth of the
economy,” the insurer said.

Insurance sector regulator, the Insurance and Pensions Commission of
Zimbabwe has so far been silent on the matter.

In a statement last late month, government had cited use of the OMIR
and mobile money transfers among factors that were driving the parallel
foreign currency market, and devaluing the Zimbabwe dollar.
New Ziana