Maravi

Zim identifies 499 European-owned companies for possible takeover

Zim identifies 499 European-owned companies for possible takeover
By Kingsley Kaswende in Harare
Tuesday July 22, 2008 [04:00]

THE Zimbabwean government has identified 499 companies owned by European businesspeople as possible targets for takeover this year. Pursuant to the new indigenisation law which requires foreign firms to cede at least 51 per cent shares to indigenous black Zimbabweans, the government said over the weekend that it had begun auditing the ownership of Western companies operating in Zimbabwe and to counter the possible withdrawal of investment under sanctions imposed by Britain and the United States.

A notice inserted in the pages of the state press on Sunday stated that preliminary results of the audit showed that British investors had interest in at least 499 Zimbabwean companies while 353 firms had shareholders from other European countries.

A list of the identified companies indicates that of the 499 companies with British investment, 309 of them have majority shareholders based in the United Kingdom.
Of these, 97 are 100 per cent British-owned.

The notice stated that these companies would be targeted for takeover by local investors and companies from "friendly" countries, particularly those in the Far East, should they heed calls by the US and European governments for them to disinvest from Zimbabwe.

Most of the Western investment in Zimbabwe is concentrated in tourism, agriculture, manufacturing and food processing industries.
According to an inventory drawn up by investigators, most of the capital used to set up enterprises in the country came from the UK, the US, Denmark, France, Germany, the Netherlands and Switzerland.

The audit also says British nationals have interests in 134 companies in which locals have majority shareholding while 56 companies have equal shareholding between locals and the British.
Zimbabwe has passed the indigenisation and economic empowerment Bill, which seeks to ensure that at least 51 per cent shares in all public-owned companies are taken over by indigenous black people.

RBZ governor Dr Gideon Gono recently warned the government to handle the indigenisation and empowerment carefully.
Dr Gono suggested that firms worth below US$150 million should only be taken over within five years. Those between US $150 million and US $500 million, should only be acquired 30 per cent, with total compliance expected between six and 10 years.

For those beyond US $500 million the first five years should target only 20 per cent, 45 per cent between the sixth and 10 years with total compliance expected between the 11th and 15th year.
This gradual approach, he said, would promote fair valuation, reasonable return on initial investment outlays by investors, as well as smooth transition from old to new shareholders.

Dr Gono said the government should be wary of a few "well-connected cliques" that were supporting the initiative in order to amass wealth to themselves greedily whilst the intended majority remain with nothing, as it happened in the land reform programme.

Labels: BEE, ZIMBABWE

posted by MrK @ 3:43 AM