Maravi

(NEWZIMBABWE) Companies could lose permits: Kasukuwere

Companies could lose permits: Kasukuwere
by Business reporter
21/04/2010 00:00:00

INDIGENISATION Minister Saviour Kasukuwere has warned that companies that fail to comply with the country's empowerment regulations risked losing their operating permits as government again reiterated there would be no re-think of the contentious measures.

Kasukuwere told journalists in Harare on Tuesday that government had extended by a month the deadline by which foreign-owned companies must submit plans for the transfer of 51 percent of their shareholding to locals.

"Government last week acknowledged the pressures faced by reporting companies in meeting the deadline. It has to be appreciated that a good number of the companies, which are affected by this law are domiciled abroad and have intricate shareholding structures, which make their decision-making process drawn out.

"In recognition of this reality, Government decided last week to extend the deadline in the regulations by another month to May 15 2010," Kasukuwere said.

Companies were intially supposed to have submitted their plans to government by the 15th of April but many failed to meet the deadline sparking fears of possible arrest. But government allayed the concerns, insisting there would be no arrests over the issue.

However Kasukuwere warned that firms that fail to meet the extended dealine could have their operating permits suspended.

"If companies don’t voluntarily submit their empowerment plans within the set deadline, my ministry will identify those companies and we will give them a form, which they have to fill within 30 days.

"If they still don’t comply, we will publish their names in the Government Gazette and that is when the legal process will kick start. The minister is empowered in terms of the law to suspend their operating licence," he said.

The minister dismissed claims that the regulations were aimed at facilitating the take over of foreign owned businesses without compensation saying beneficiaries would have to pay fair and full value for the shares.

He said application of the regulations would be compulsory in strategic economic sectors such as non-renewable resources adding government had also agreed that implementation of the policy would begin with the lucrative mining sector.

The government has also warned against "psuedo localisation" programmes where "black masks" would be used as fronts for "white corporate interests".

"President Mugabe emphasised that the programme of indigenisation should not be an avenue for creating pseudo owners who are mere fronts or blacks who slide into the same shoes of exploiters and externalisers for the benefit of the metropolis,"Kasukuwere said.

Under the country's Indigenisation and Economic Empowerment Act, foreign-owned companies worth at least US$500 000 are required to transfer 51 percent of their shareholding to locals within five years.

Critics say the law will scare away much needed international capital at a time the economy is struggling to recover from a decade-long recession while the coalition administration also appears divided over the measures.

But President Robert Mugabe dismissed reports that the regulations would be reviewed insisting, during celebrations to mark 30 years of independence, that there was no going back over the issue.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), SAVIOUR KASUKUWERE

posted by MrK @ 2:49 AM