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(ZIMPAPERS) Govt reads riot act to errant companies

Govt reads riot act to errant companies
Saturday, 12 March 2011 23:15 Top Stories

THE Government has identified nearly 800 foreign-owned companies, including food giant Innscor and beverages manufacturer Coca-Cola, that are still to comply with provisions of the Indigenisation and Economic Empowerment Act — which require them to cede 51 percent of their shareholding to locals — and has initiated moves to compel the firms to implement the law or risk prosecution.

According to a list obtained from the Ministry of Youth Development, Indigenisation and Empowerment, the 795 companies have neither complied with the law nor submitted proposals on how they wish to reconfigure their shareholding structures in line with the law of the land.

The Ministry’s Permanent Secretary, Mr Prince Mupazviriho, yesterday confirmed that the Government would read the riot act to defiant companies after the inventory was drawn last week.

“We have now reached the process of de-registering defiant companies and any time from now, some companies will be closed for defying the indigenisation law,” said Mr Mupazviriho.

Mr Mupazviriho said the identified companies had failed to meet the requirements of the Indigenisation and Economic Empowerment Act despite advice from the ministry.
He said Government had been corresponding with the companies, urging them to comply with the Act, but there was strong resistance.

“We have sent communication to some of the companies to urge them to comply with the Act, but we have experienced resistance from a number of them.

“This is not going to be a ‘one size fits all approach’ but it will be a targeted process. We have a list of about 900 companies that we believe fall within the (legislated) threshold and some of them will be closed.

“The minister has the prerogative to revoke the licence of any defiant company, so this will be enforced,” he said.

Officials close to the implementation of the law said the ministry was working in liaison with the Attorney-General’s Office for legal advice to effect prosecutions.

It emerged that some foreign-owned companies were in a bid to sabotage the process by dragging their feet in presenting their compliance modules.

“This time the process is going to be harder than before. A number of businesspeople will end up in jail because of breaking the law,” said the source,”

The source said the tide would also catch up with foreigners that are using locals as business fronts to circumvent the law.

Mr Mupazviriho confirmed that the ministry was investigating cases of fronting while some British and European shareholders were refusing to comply with the Act, arguing that they were indigenous Zimbabweans.

“We are investigating some of them for fronting. Some could have changed ownership while others are under trustees. Some of them claim they are third generations born in the country.”

However, according to the Act, an indigenous Zimbabwean “is any person who before the 18th of April 1980 was disadvantaged by unfair discrimination on the grounds of his or her race, and descendant of such person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest.”

The list of companies that are still to comply includes food processing firm Nestle Zimbabwe, diversified giant Innscor, Unifreight Group, Coca-Cola Central Africa, Fidelity Assurance, Interfresh, Pretoria Portland Cement, BOC Zimbabwe, Zimbabwe Spinners and Weavers, Steelmakers and Star Africa.

Other notable companies are Zimplow, Radar Holdings, RM Insurance, Stancom Tobacco, Nissan Zimbabwe, Trans Zambezi, Unilever, Cimas, Triangle Limited, Veritas Financial, Bandal Transport, Malilangwe Conservancies, Kohler Zimbabwe and Hubert Davies.

Meanwhile, the Government on Friday completed drafting fresh regulations outlining the operations of mining companies.

The draft, which will soon be submitted to the Attorney-General’s Office, upholds the 51 percent indigenous ownership of all claims in the country except for alluvial diamonds, which are 100 percent owned by the State.

Rebuffing statements made by the Chamber of Mines president Mr Victor Gapare that the mining sector had agreed on 26 percent indigenous ownership, Mr Mupazviriho said any changes would be tantamount to repealing the Act.-The Sunday Mail

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)

posted by MrK @ 2:13 AM