Giant British Bank Pulls Out of South Africa

Standard Chartered PLC today announced the sale of its South African subsidiary to local businesses in what will be the largest foreign divestment from the racially troubled country.

The giant British banking company said the agreement provides for disposal of its 39% interest in the Standard Investment Bank Corp. subsidiary at a price equivalent to $9.35 a share or about $279.4 million.

Standard Chartered’s 22,540 employees in South Africa makes it the largest foreign company doing business there to leave.

Standard Chartered became the third large multinational bank to divest from South Africa, following London-based Barclays last November and Citicorp of New York in June.

Barclays had been the largest divestment when it sold a 40.4% stake in Barclay’s National Bank Ltd., now known as First National Bank, in a deal valued at $123.84 million.

Standard Chartered officials declined to explain why they were vacating the country, but a growing number of foreign companies have been divesting because of South Africa’s increasing racial and political tensions.

The divestments have further isolated South Africa’s white minority government, which maintains a system of segregation from the black majority known as apartheid.

In another development, labor union officials, fearing violent strikebreaking tactics by management, today urged 200,000 black mine workers to return home to neighboring black-ruled states when a strike billed as the nation’s largest begins next week.

Union officials said management at some of the 46 gold and coal mines targeted by the strike have threatened to cut off food to residential hostels during the stoppage. They also said mine owners refused to guarantee they will not employ heavy-handed strikebreaking tactics.

Urging the workers to return home is unprecedented but the union is doing it “with a view to saving lives,” said Cyril Ramaphosa, general secretary of the black National Union of Mineworkers.