Kasukuwere vows to grab companies

Sunday, 21 August 2011 15:00

BY KUDZAI CHIMHANGWA

YOUTH Development, Indigenisation and Empowerment minister Saviour Kasukuwere on Friday vowed to go ahead with plans to seize foreign-owned companies despite a stern warning by Reserve Bank of Zimbabwe governor Gideon Gono to refrain from disrupting economic revival.

State media had reported that 11 companies that failed to comply with the government’s empowerment laws, including Barclays and Standard Chartered banks had been given a 14-day ultimatum to do so or risk losing their licences.

Gono, in an uncharacteristic attack on a Zanu PF minister, warned against “irrational exuberance during these times of necessary soberness.”
Kasukuwere’s ministry is trying to enforce the controversial indigenisation regulations that seek to force foreign-owned companies to cede 51% of their stakes to locals over the next five years.

Caledonia Mining Corporation also threatened a legal showdown with Kasukuwere after he reportedly wrote to Mines and Mining Development minister Obert Mpofu instructing him to withdraw Blanket Mine’s licence.

The Canadian firm owns Blanket Mine, one of Zimbabwe’s top gold producers, which was named among the 11 companies that were on the verge of losing their licences.

“Caledonia believes the Minister of Indigenisation has exceeded his legal powers, both in terms of his assessment of Caledonia’s proposal and his request to the Minister of Mines,” the company said in a statement.

“Caledonia is seeking urgent clarification from the relevant ministers and is also consulting with its legal advisors regarding appropriate legal action.”
But Kasukuwere remained defiant, vowing to follow through his threats that have already given investors jitters at a time when the economy is desperate for foreign capital injection.

“As far as we are concerned, we are going ahead with the process and we shall effectively use the laws to empower our people,” Kasukuwere told Standardbusiness.

“They (foreign companies) have taken us for a ride for too long, we have tried to be accommodative and understanding so we shall deal with those that don’t want to co-operate.”

The minister announced recently that he had thrown out proposals by mining companies on how they intended to comply with the empowerment law.

On Friday Kasukuwere said Caledonia and other companies were free to consult lawyers from “heaven” and appeal to whoever they wanted, but his ministry was not going to look back.

Gono pointed out that the minister’s proposal flew in the face of the Southern Africa Development Community proposals of stabilising the banking sector, at a time when the world was facing a double dip economic recession. “To this end, therefore, the timing of any move that we may take or intend to take is important,” Gono advised. “May all stakeholders please be guided accordingly and take heed before it’s too late.”
He said he was issuing the statement in order “to avoid fly-by-night, reckless and excitable flexing of muscles and decisions that overlook certain fundamentals that could irreparably harm the nerve-centre of our recovering economy.”