“Old Mutual can confirm on-going dialogue with the authorities as part of the process of complying with the relevant legislation. Old Mutual Zimbabwe has a plan implemented,” said Luke Ngwerume, Old Mutual group CEO.
Ngwerume said the group believes that the board approved plan meets the requirements of the relevant legislation.
“We will continue to engage the Minister and his team on the ongoing implementation process,” he said.
“We would like to reassure all our stakeholders – shareholders, staff, customers—that we are mindful of our obligations to them and will seek to protect their interests in this process.”
Last year, Old Mutual said it would offload 27% to employees, 17% to local pensions and 7% to the National Indigenisation Trust Fund. However, the company seemed to have been reneging on its earlier pledge forcing Kasukuwere to order Old Mutual comply.
In a letter dated September 1, 2011, Kasukuwere said the ministry had lost patience with the financial services group.
“In the circumstances, you are required to provide me with the progress report within seven days of receipt of this letter, failure of which no further indulgence shall be granted,” reads part of the letter Kasukuwere wrote to Old Mutual.
The Indigenisation and Economic Empowerment Act became operation in April 2008 to increase the participation of indigenous Zimbabweans in the economy.
Foreign owned companies operating in Zimbabwe have to submit proposals on how they would dispose of 51% shareholding to locals.
Companies that did not respond or have not complied with the legislation will be prosecuted or have their business operating licences cancelled, according to Kasukuwere.
Government has already outlined the modalities for the mining sector and it is now moving to other sectors of the economy.
According to an extraordinary Government Gazette published in March, a controlling interest or 51% of any foreign owned mining company with a net asset value of at least US$1 is required to be held by either the National Indigenisation and Economic Empowerment Board (NIEEB), or the Zimbabwe Mining Development Corporation (ZMDC); or any company or other entity incorporated by the ZMDC or NIEEB; or a statutory sovereign wealth fund that may be created by law.
It can also be transferred to an employee share ownership scheme or trust, management share ownership scheme or trust or community share ownership scheme or trust.