AFP

Zimbabwean President Robert Mugabe.

About 700 foreign companies in Zimbabwe missed a deadline to submit plans to sell 51 percent of their shares to local blacks under a new law, a government official said Tuesday.

Wilson Gwatiringa, head of the National Indigenisation and Economic Empowerment Board, said firms defying the so-called indigenisation law would face “serious consequences” including “cancellation or suspension of operating licences as well as payment of hefty fines.”

“Many non-indigenous companies have not complied with the indigenisation law as they are reluctant to submit their indigenisation plans for approval,” said Gwatiringa.

He estimated that “maybe around 700” companies had not complied, adding that the board “will be undertaking a wide-scale compliance audit across all sectors of the economy.”

Gwatiringa urged all foreign-owned companies to submit their new shareholding proposals to the board, although the deadline had passed on September 25.

“We would like to encourage all companies and businesses that have not complied with the indigenisation law to take immediate steps to do so,” he told a news conference.

Gwatiringa said those that defied the directive would face “serious consequences” that include “cancellation or suspension of operating licences as well as payment of hefty fines.”

Under a new law, all foreign-owned companies - including banks, mining and manufacturing firms - must sell 51 percent of their equity to local blacks by 2015.

But Zimbabwe has also proved willing to strike individual deals with companies, giving platinum-mining giant Zimplats more time to submit its proposal and allowing British insurer Old Mutual to conduct a “first phase” of compliance by handing over 25 percent of its shares.

Long-ruling President Robert Mugabe says the indigenisation law aims to fight poverty and put control of the economy in local hands, but the scheme has raised tensions within the shaky unity government with Prime Minister Morgan Tsvangirai.

Tsvangirai's party, which holds most economic portfolios in government, fears the law will scare off investors. - Sapa-AFP