Tongaat Hulett: Indigenisation law needs review

SUGAR producer Tongaat Hulett said its spending on communities in Zimbabwe should count as equity to enable the firm to comply with a black economic empowerment law. President Robert Mugabe’s government is promoting indigenisation of company ownership, forcing all foreign-owned firms to sell a minimum of 51 percent shares to blacks. Tongaat said it had trained farmers, bought them farming inputs and paid for roads, schools and hospitals in communities where it operated in the country. “I respectfully submit that the indigenisation law requires review to remove the emphasis on shareholding and focus on empowerment credits,” Sydney Mtsambiwa, Tongaat’s managing director in Zimbabwe told a committee of parliament. Empowerment credits are points awarded to a firm for investing in communities and count as equity, authorities say. Mtsambiwa said the requirement for foreign companies to sell their shares as stipulated by the law was scaring off investors. – Reuters