Govt courts ZSE for share buy-off

Published: 04 April 2014

The minister of Youth, Indigenisation and Economic Empowerment says government intends to engage the Zimbabwe Stock Exchange (ZSE) on the disposal of shares reserved for indigenous people to locals trading on the market.

Francis Nhema said this would enable a number of Zimbabweans to purchase company shares while achieving the 51/49% ownership prescribed by the Indigenous Act.

"In the future indigenous people will be able to purchase shares of companies through the Zimbabwe Stock Exchange.

"It is important to note that these shares will be sorely reserved for the indigenous locals and no foreigners will be allowed to purchase these shares.

"As a surety to ensure that this condition will be adhered to we are going to work on a law that will guard against unscrupulous business people," told members of Parliament's Indigenous and Economic Empowerment Committee yesterday.

The minister said as has always been the case for companies that are indigenising, in the event that all the shares are not taken up by local indigenous people, the National Indigenisation and Economic Empowerment Board is mandated to purchase them and hold them in custody until a time when potential
investors have money to buy the shares.

Under the Indigenisation and Economic Empowerment Act, companies have until March 2015 to change the ownership of their businesses so that 51% of their shareholding is
owned by indigenous Zimbabweans.

Nhema also clarified that indigenous Zimbabweans are those who were unfairly disadvantaged as a result of their race before 1980, as well as their descendents.

Under the Act, only indigenous Zimbabweans are allowed to operate in reserved sectors, including salons, bakeries, estate agents and advertising agencies, and they must have
a compliance certificate to prove this.

According to section 3 (5) of the Indigenisation and Economic Empowerment Act (Chapter 14:33), the minister may prescribe that a lesser share than 51%, be acquired by indigenous Zimbabweans in any business referred to . . . but in so doing he or she shall prescribe the general maximum timeframe within which the 51% share shall be attained.

Minister Nhema, however, said that even if this situation maybe so for a while Section 3 (5) does not empower the minister to forego the objective of the Act that 51% of any business be controlled by indigenous Zimbabweans.
- Zim Mail

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