Zhuwao digs in on company closures

via Zhuwao digs in on company closures – NewsDay Zimbabwe March 30, 2016

PRESIDENT Robert Mugabe’s nephew and Indigenisation minister Patrick Zhuwao is insisting the government will not go back on its threat to shut down companies that do not comply with the contentious indigenisation law by Friday.

BY RICHARD CHIDZA

In an interview with NewsDay yesterday, Zhuwao, who has in the past described Finance minister Patrick Chinamasa’s attempts to give breathing space to investors as treachery, said the government has scrapped the issue of levies for non-compliant companies.

“I have not given companies anything. Statutory Instrument 21 of 2010 gave companies up to March 1, 2015. It is not a personal issue, but comes by mere operation of the law. All companies that have not complied as of March 2, 2015 are operating illegally,” he said.

Zhuwao said he had been “given a responsibility to ensure compliance,” adding his ministry had conducted consultations with business resulting in General Notice 9 of 2016.

“It (notice) sought to engage business and I have engaged with business. So every company that has not complied knows it is operating illegally,” he said.

“Nobody opposed the Cabinet resolution when it was passed, but some people turn into pseudo-consultants, who lie to businesspeople that there is a chance the law will not be implemented. It is their way of making money. Companies have a right to associate and engage whoever they want and that right includes the right to be foolish, but they (companies) will realise it too late. The issue of a levy is off the table, it was killed by business.”

Zhuwao said the government has a right to revoke licences.

“The Indigenisation Act gives provision for dealing with non-compliance. The law talks about revocation of licences and it also talks about non-renewal,” he said.

Zhuwao said the indigenisation law does not scare away investors because it is also available in other territories, where there is investment.

“I swore an oath to abide by the law. What I know is that there is this piece of legislation that also appears in other territories and the fact themselves do not add up when people say they are afraid of the Indigenisation law.”

Zhuwao last year had a run-in with Chinamasa over the implementation of the law that requires companies to sell 51% of their shareholding to locals as part of economic empowerment. Chinamasa argued non-compliant companies could be charged a levy rather than be forced to close. But Zhuwao said the levy was his idea.

“If you go to General Notice 349A of 2015 published by Chinamasa and General Notice 9 of 2016, you will find that there is no difference.

My issue at that time was that the general notices Chinamasa sought to have me publish had not been cleared by my principal the President and these had also not been subjected to Cabinet. It is a general notice by the Finance minister that provides a schedule of a document still under discussion,” he said.

Zhuwao said Chinamasa’s general notice was a legal nullity.

“It does not have legal force and effect. A half competent lawyer will tell you that a general notice does not have legal force and effect, primarily because such notices are issued in terms of a section of the law. The pieces of legislation that are enforceable currently are the primary Act and Statutory Instrument 21 of 2010,” he said.