Sources said the 2007 Indigenization and Economic Empowerment Act will apply to companies with assets of at least US$3 million dollars rather than US$500,000 as spelled under regulations published last month
Zimbabwe's Office of the Attorney General has stepped into a controversy over corporate indigenization, sources said Friday, drafting new regulations that will limit the exercise to relatively large companies and specify that shareholdings obtained by Zimbabwean blacks will have to be purchased rather than ceded as now worded.
Sources said the 2007 Indigenization and Economic Empowerment Act will apply to companies with assets of at least US$3 million dollars rather than US$500,000 as spelled under regulations published last month, and the threshold could be set as high as US$5 million.
There are also proposals afoot to establish an administrative court to rule on disputes arising from the indigenization process and a compliance board to enforce indigenization provisions.
The move by Attorney General Johannes Tomana could defuse a looming confrontation between Prime Minister Morgan Tsvangirai and Indigenization Minister Saviour Kasukuwere over revision of the regulations.
Corporate lawyer Matshobana Ncube told VOA Studio 7 reporter Gibbs Dube that the Office of the Attorney General is expected to draft regulations in line with the Constitution and various acts of Parliament.
The indigenization legislation "should not contravene any laws especially the supreme law of the land,” he said.
But Chamber of Mines Executive Officer Christopher Hokonya said members of his organization have become concerned at reports the government is moving to take over some foreign-owned mining firms even as the indigenization regulations are being revised.
Mining companies have recently submitted proposals to allocate 15 percent of equity to indigenous shareholders rather than 10 percent as earlier proposed. But Hokonya reported general uncertainty in the sector as “we do not know whether our proposals have been affected."
He said some companies that are not comfortable with the 51 percent indigenous stake prescribed by the 2007 Indigenization and Economic Empowerment Act have offered to increase investment in communities.
“These companies can then be allowed to offer something as low as 15 percent and then the investments being recognized as equity equivalent credits towards the 51 percent,” Hokonya told VOA.
Minister Kasukuwere recently dismissed as “unguided and futile” Chamber of Mines proposals for a 10 percent indigenous stake, saying Zimbabwe would rather close all mines than accept that level of participation.