Zimbabwe’s Indigenisation Minister Patrick Zhuwao today backed off threats to take precipitous action and close foreign firms deemed to be non-compliant with the country’s local ownership law, but accused the central bank of misleading foreign banks over the regulations.
Last week, Zhuwao announced that President Robert Mugabe’s cabinet had given a March 31 ultimatum for the cancellation of licences for all foreign firms that have not complied with Zimbabwe’s empowerment law, which requires the transfer of majority control in all major businesses to local blacks.
Legal experts have, however, said the law does not empower government to cancel business licences over non-compliance with the law.
On deadline day today, Zhuwao told reporters that non-compliant firms would be subjected to a process before their licences were cancelled. Even then, Zhuwao seemed to change tack, hinting at exerting pressure on foreign-listed firms on their respective bourses.
“That process is very exhaustive; it’s a fair and thorough process. It is a process which starts with a line minister satisfying himself or herself that there is no serious intention to comply. Then the line minister will notify the non-compliant business that they have not complied and that if they continue to defy, the minister has the intention of withdrawing the licence,” Zhuawo said.
“The minister will also give the non-compliant company an opportunity to show just cause, to explain why they are not complying with the law. If the non-compliant company doesn’t show just cause for not complying, then the minister will direct the non-compliant company to comply. Should the non-compliant company not comply; the line minister will notify relevant third parties.”