THE 2007 order by Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, compelling all commercial banks to lodge their foreign currency accounts balances with the central bank has been ruled unlawful as it had not been approved and gazetted by the Finance minister.
Report by Charles Laiton
This came to light in a High Court case pitting Standard Chartered Bank of Zimbabwe and a Kwekwe-based Chinese firm, China Shougang International.
In his judgment, High Court judge Justice Francis Bere ordered the central bank to reimburse the Chinese firm the sum of $47 789,86 which the former had submitted to the RBZ on Gono’s orders.
Many companies had their money sent to the central bank by their individual banks without their consent because of the RBZ directive and most have not recovered that money to date.
“It has not been demonstrated to me by respondent’s (Standard Chartered Bank) counsel that the directive by the RBZ was lawful or above board,” Justice Bere said in his judgment delivered in May under case number HC4447/11.
“It occurs to me that what respondent did in this case was to blindly expropriate the applicant’s (China Shougang International) deposits without due regard to the law and this was obviously ultra vires even the Constitution of this country.”
Standard Chartered Bank, however, through its lawyer Advocate Adrian de Bourbon, appealed against Bere’s judgment at the Supreme Court under case number SC328/11. But the matter was on Thursday last week struck off the roll by Deputy Chief Justice Luke Malaba sitting with Justices Anne-Mary Gowora and Paddington Garwe for non-compliance with the Supreme Court rules.
“The respondent has been stubborn in refusing to accede to the applicant’s claim. The respondent took an extremely dangerous or casual approach in paying out the applicant’s deposit to a third party without approval and/or consent of the latter, let alone before attempting to verify the lawfulness or otherwise of the RBZ directive.
“I believe the conduct exhibited by the respondent is deplorable and must be punished by an appropriate order for costs,” Justice Bere said.