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(HERALD) Barclays, Stanchart get 14-day ultimatum

Barclays, Stanchart get 14-day ultimatum
Friday, 19 August 2011 02:00
Fanuel Kangondo Deputy Business Editor

BARCLAYS Bank, Standard Chartered, six mining companies and five other firms have been given a two-week ultimatum to submit acceptable indigenisation plans or risk losing their licences with the Government taking over ownership.

Mining firms affected include platinum giants Zimplats and Mimosa, gold miners Duration Gold Mine and Blanket Mine and Murowa Diamonds. British American Tobacco, infant foods manufacturer Nestle Zimbabwe and cotton processor Cargil Zimbabwe are also affected.

Letters signed by Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere gave the companies two weeks to comply or risk losing their licences.
Some of the letters were dated July 28 and this week ministry officials said they were still awaiting responses from the affected companies.

The affected companies were re-quired by law under the General Notice 114/2011 to submit indigenisation plans detailing how they inte-nd to meet 51 percent direct equity participation by locals within five years.

If the companies fail to rectify their non-compliance, the minister is empowered under the Indigenisation Act to institute proceedings to cancel their licences.
In the case of mining firms, this will be done through the Ministry of Mines and Mining Development while the Reserve Bank is responsible for licensing financial institutions.

An official in the ministry's legal division said if the firms fail to submit compliant indigenisation plans, moves would be taken to cancel their licences and the State would acquire them. Most of the affected companies refused to comment on their status, saying they were communicating directly with officials from the responsible ministry.

Minister Kasukuwere recently told a Confederation of Zimbabwe Industries congress that 700 foreign owned companies had submitted their Indigenisation and Empowerment proposals to the Government.

He said of these, 175 were mining companies which had previously proposed that they were only prepared to sell 26 percent direct equity to locals, while the balance adding to 51 percent would be met through social credits.

This was, however, thrown away when Minister Kasukuwere said credits could not be used to meet indigenisation thresholds.

Instead, Government wants workers and communities where these companies operate to get direct equity.

A certain portion of the equity could be held in trust under a sovereign wealth fund to benefit future generations.

The full list of the companies and the deadlines given, is:

Affected companies Deadline

Standard Chartered Bank- 14 days
Murowa Diamonds (Pvt) Ltd -14 days
Pan American Mining (Pvt) Ltd- 14 days
Zimplats -14 days
Blanket Mine -7 days
Barclays Bank Zimbabwe Ltd -14 days
Mimosa Holdings- 14 days
Duration Gold Mine -14 days
British American Tobacco- 7 days
Nestle- 14 days
Cargil Zimbabwe (Pvt) Ltd 14- days

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

posted by MrK @ 2:16 PM