Zimbabwe pondering fate of foreign firms shirking equity

Zimbabwe will decide Monday the fate of foreign firms that missed a deadline to map out how they will transfer majority stakes to local blacks, a cabinet minister said. "We will make a decision tomorrow on companies that have not complied," indigenisation minister Saviour Kasukuwere told AFP on Sunday, the day of the deadline for compliance with an equity law that has alarmed investors. She would not say how many companies were affected. "We are going to invoke provisions of the law and determine what should be done with companies that have complied, those who have shown willingness to comply and those who are outright arrogant and have refused to comply." Foreign firms had until Sunday to submit plans on how they will comply with the law which requires black Zimbabweans to hold a stake of at least 51 percent. The law has caused anxiety among foreign investors and division in Zimbabwe's power-sharing government between President Robert Mugabe and long-time rival Prime Minister Morgan Tsvangirai. Zimbabwe has given the platinum-mining giant Zimplats more time to meet the requirements of the law and reached an agreement with Old Mutual allowing the British insurer to conduct a "first phase" of compliance which will see the firm place 25 percent of its local subsidiary in the hands of black Zimbabweans. The shares will be awarded as grants, mainly to pensioners and staff, but also to partners and a youth development fund, Kasukuwere said. The minister has argued that the law is not aimed at victimising foreign companies, but rather to fight poverty and put control of the economy in local hands. The project has been called the final phase of "economic emancipation" following controversial land reforms targeting white-owned farms a decade ago that involved often violent takeovers. Kasukuwere had earlier warned that non-compliant companies risk nationalisation.