British bank accused of propping up Mugabe regime

By Alex Bell

27 February 2009

A British bank currently operating in Zimbabwe has been accused of propping up Robert Mugabe, reportedly by transferring money directly to the dictator’s regime.
The accusations by the UK’s Foreign Office were made in internal British government emails last year, which showed concern about the involvement of Standard Chartered Bank in Zimbabwe. According to the emails, seen by the UK’s Telegraph newspaper, an internal Foreign Office briefing document accuses the bank of diverting money directly to Mugabe’s government, through a loans scheme.
According to the Telegraph, the one email, dated August 25 2008, says: “Standard Chartered risks real reputational damage if seen as passing funds to the Government of Zimbabwe.” A further email from July last year accuses banks operating in the country of ‘propping up’ Zimbabwe’s Reserve Bank, which has a notorious reputation for diverting funds to Mugabe’s cronies. The August email even suggests that Standard Chartered should close its operations in the crisis ravaged country, reading: “We should ask the companies to take a long hard look at what they are doing and with whom.”
UK leaders have been particularly critical of Mugabe and in turn, Mugabe has repeatedly voiced his hatred of such Western powers. However the emails will likely cause more embarrassment for the British government as the bank, up until last month, was run by the recently appointed UK Minister of Trade and Investment.
Standard Chartered Bank Zimbabwe is 100% owned by Standard Chartered UK, but because it operates as a Zimbabwean registered company, its operations are not governed by EU targeted sanctions against the Mugabe regime - which effectively cut all financial ties with the dictator and his known associates and supporters. According to a British opposition MP who obtained the emails, British banks have been able to ‘circumvent’ the sanctions restrictions by operating through Zimbabwean based companies. The MP has said the revelations “demonstrate just how weak and inadequate the sanctions rules have been - and the hypocrisy of the Government.”
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