Crisis Looming As Company Takeover Kickstarts

Radio VOP has it in high authority that Harare adminstration has started writing to a number of foreign owned companies informing them that it is in the process of withdrawing their licences due to failure to comply with the country’s black economic empowerment laws.

Zimplats has been given 14-days to show cause why its licence should not be withdrawn. Mining industry sources said the same directive also applied to Murowa Diamonds, Mimosa Mine and Duration

The country’s Indigenisation and Empowerment Act requires foreign mining firms to sell 51 percent direct equity to locals or the State. The government rejected the mining companies’ proposals to sell25 percent direct equity to locals and 26 percent to be made up of social investment credits.

Local communities, workers and management will get direct equity in foreign mining firms and this will be taken from the 26 percent mines had wanted to be met through social investment credits. Part of the 26 percent mining firms wanted met through social credits will also be housed under a sovereign wealthfund for future generations.

Officials added yesterday that the same situation was being applied to the financial sector. The government would be formally notifying Barclays Bank and Standard Limited on their failure to comply with the country’s BEE laws. Saviour Kasukuwere, the minister of Indigenisation, confirmed the blitz on non confirming foreign firms.

 “It is true that we are now moving to take over these non-complying companies. The government has talked for too long. It is now time to take action,” said Kasukuwere. The government has indicated that banking institutions unwilling to comply, were free to leave the country, as some of them were “behaving like estranged women” by refusing to lend money to local companies.