Brown, whose Impala is the world’s second largest platinum producer, said during a conference call with journalists on Tuesday that the share transfer plan that President Robert Mugabe says is meant to place control of the economy of indigenous Zimbabweans was unworkable and retrogressive.
Under an economic empowerment and indigenisation law that came into force last year, foreign-owned firms must sell at least 51 per cent of shares to locals or face a host of punitive measures including fines, imprisonment and or withdrawal of operating licences.
“We believe that 51 per cent equity just does not work,” said Brown. “(It) has the potential to retard investment,” said the Impala boss, echoing warnings by the International Monetary Fund earlier this year that the empowerment programme could damage Zimbabwe’s impressive but still fragile economic recovery after a decade of acute recession.
Impala’s Zimbabwe unit Zimplats is the country’s biggest platinum producer, while accounting for close to 10 per cent of group earnings.
Zimplats on Tuesday said that it was in talks with the government over its empowerment plan that was also rejected.
Indigenisation Minister Saviour Kasukuwere last month turned down share transfer proposals from 175 mining firms including Zimplats, saying they did not meet the legislated indigenisation requirements.
The companies are reworking the empowerment plans for resubmission to Kasukuwere, who this week relented on plans to withdraw the licence of Blanket Mine after its Canadian owner, Caledonia Mining Corporation, agreed to revise its empowerment plan.
Apart from Zimplats and Blanket, other foreign firms ordered to transfer shares to locals include Aquarius Platinum, Rio Tinto’s diamond mine Murowa, British American Tobacco and local units of British banks Standard Chartered and Barclays.
Mugabe’s previous government used its majority in Parliament in 2007 to ram through the indigenisation law requiring all foreign-owned companies to cede at least 51 per cent of their shares to black Zimbabweans.
Critics say the empowerment campaign is a ploy by Mugabe to seize thriving businesses and hand them over to his allies as a reward for support much in the same way that the veteran leader’s land reforms were executed in the name of the people but benefited his top lieutenants the most.
Prime Minister Morgan Tsvangirai, who says he is for genuine indigenisation of the economy that benefits ordinary Zimbabweans, has castigated Mugabe’s empowerment drive as “looting by a greedy elite”.
Post published in: News