28 January 2013

Zimbabwe: Monday, 28 January 2013 - Issue 507

press release

Zanu PF's Community Share Ownership Scheme is a dubiously crafted piece of regulation in the Indigenisation and Empowerment Act which was clandestinely and hurriedly slotted by Kasukuwere in a desperate attempt to sanitise a flawed act.

The Scheme is in fact an afterthought which is not backed by the Empowerment Act. Hon Biti gives a blow by blow account of Kasukuwere's ill thought out programme which is meant to benefit Zanu PF's fat cats while at the same time fleecing companies out of compliance;

"If you look at the basis of the Indigenisation is the Indigenisation and empowerment act number 32 of 1997 which the President signed into law on the 10th of April 2008. The basis of the indigenisation act is acquisition by Zimbabweans, indigenous Zimbabweans, of 51% of shares into a company, that's what it says. So in the indigenisation and empowerment act, you will not find the word community share trust, you will not. Then you come to the regulations, statutory instrument number 30 of March 2010 that was passed or enacted by Saviour Kasukuwere, again you will not find the name community share trust.

" As an afterthought, in his third regulations, you will find the introduction of community share ownership schemes as a veneer to give some kind of legitimacy to a process and a legal process that was predatory and elitist in the manner I have described it, namely the purchase of shares in already existing companies which can only be done by the rich and in the case of Zimbabwe, by the super rich.

So the issue of community share schemes is actually an afterthought which is not backed by the empowering act, the indigenisation and empowerment act. Such that community share schemes don't actually have legal existence vis a vis the Indigenisation and empowerment act.

"Now, let's come to the debate whether they are working or not, number one, on what legal basis are companies being made to part with US$10 million dollars or US$15 million? There is nowhere in the Indigenisation act that compels companies to donate money to a community share scheme or to any farm or to anything so what you are actually seeing is coercion; companies being forced to part up with US$10 or US$15 million.

Now, even assuming they are giving that voluntarily, to the extent that there is no company in Zimbabwe that I know of which has actually parted with 51% of its shareholding whether its Zimplats or not, you are having the anomalous situation where companies are bribing themselves out of compliance with the act by paying a mere US$ 10 million, US$5 million, whatever is the amount of the community share scheme. Another problem with this empowerment programme, is certainly in the way it is being implemented, it is very opaque. Nobody knows the circumstances that those companies are parting with those monies" Hon Biti said.

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