Accessibility links

Zimbabwe Suspends Company Take Overs by Blacks


Zimbabwe's Cabinet has postponed the regulations for domestic and foreign companies to submit plans to hand 51 percent of shares to black Zimbabweans. The decision is a triumph for Movement for Democratic Change legislators.

MDC trade, finance and investment ministers in President Robert Mugabe's cabinet successfully suspended regulations to give black Zimbabweans control over all the country's private and publicly-owned companies.

The cabinet decided to extend the April 16 deadline for companies valued at more than $500,000 to submit plans of how they would give majority shares to black Zimbabweans. No new date was put forward in the cabinet.

After the indigenization regulations were published two months ago, shares on the Zimbabwe Stock Exchange crashed and potential investors fled, according to many in Zimbabwe's business community.

Prime Minister Morgan Tsvangirai's spokesman, James Maridadi, confirmed the regulations have been suspended. Other political sources say the regulation will be substantially revised after consultations with business, legal and parliamentary committees.

Legal expert Derek Matyszak, the author of a recent detailed critique of the regulations, said a board to enforce them was appointed shortly after Swiss-based Nestle refused to accept milk last October from a dairy occupied and run by Mr. Mugabe's wife, Grace.

Nestle, said it was illegal for it to buy Mrs. Mugabe's milk because she is on the list of Zimbabweans with whom EU citizens may not trade, and the Swiss government has the same laws.

The indigenization laws would also make it illegal for any white person to control companies that process milk.

Matyszak said the laws had been drafted carelessly. "I would have been very surprised if the regulations had got past the parliamentary legal committee because they were unimplementable in the form in which they were in," he said. "They were unimplementable from a technical point of view, from a legal point of view and from a constitutional standpoint."

Matyszak said the good news about the suspension of the indigenization of Zimbabwe's companies is in contrast to widespread disappointment among civil rights activists over the recent establishment of a new Zimbabwe Electoral Commission.

He said the electoral commission would effectively be controlled by its vice chairman, who was on the previous commission that ignored violence during the presidential elections of 2008.

"MDC had the power to ensure that a very robust Zimbabwe Electoral Commission was put into place," said Matyszak. "They have squandered that opportunity. The chairperson of the commission is a Namibian judge who is based in Namibia, so quite clearly he will not be able to be very hands on and it is likely he will only come into the country during election periods."

Matyszak said the Movement for Democratic Change has failed to use its parliamentary majority to ensure commissions in the unity government are effectively controlled by trusted democrats.

XS
SM
MD
LG