Business / Companies
Innscor gets indigenisation ultimatum
13 Jan 2013 at 05:52hrs | Views
Government has given Innscor Africa a seven-day ultimatum to submit a comprehensive indigenisation implementation plan after authorities adjudged that the group of companies was taking long to comply with indigenisation regulations.
In a letter addressed to Innscor Africa chief executive officer and director Mr John Koumides, National Indigenisation and Economic Empowerment Board (Nieeb) chief executive officer Mr Wilson Gwatiringa said Government's patience with the firm was running out.
He said the necessary action would be taken to nudge it towards full compliance with the law.
Mr Koumides refused to comment when contacted last Friday.
Part of the letter reads: "The Ministry (of Youth Development, Indigenisation and Empowerment) and Nieeb are losing patience with your unwillingness to move towards full compliance with the law.
"The company should have sought to comply within the time limits established by the law and this was not done.
"We, therefore, request that you submit a proper indigenisation implementation plan within seven days from receipt of this letter . . ."
Mr Gwatiringa also told Innscor Africa that its "indigenous" status was based on an erroneous understanding of what comprises an indigenous company.
He said Government was concerned about the group's list of directors and associated companies, which "show that over 99 percent of your directors are non-indigenous".
"A person can be Zimbabwean but not be indigenous. It is incumbent upon the company to submit a proper indigenisation plan," reads another section of the letter.
A senior Government official last week revealed that Innscor management undertook to fully comply with indigenisation requirements during a meeting with Government representatives late last year.
The official said it later turned out the firm had misled authorities into believing it was "indigenously owned to the extent of 81 percent".
"After we scrutinised the company's shareholders to verify their claim, we realised the company is only owned 5,17 percent by indigenous Zimbabweans," said the official.
"They gave an assurance that they will comply by the end of January. They are, however, yet to put that undertaking in writing."
Mr Gwatiringa last week confirmed writing the letter.
"Like any other company, we are expecting them to comply with our laws. Yes, we are engaging them so that their group will be in compliance with our laws," he said.
"It is simple; their companies need to comply as per the relevant sector of manufacturing. We are expecting them to submit their plan soon.
"We want their shareholding to reflect our laws." Zimbabwe passed the Indigenisation and Empowerment Act in 2008 as part of efforts to economically empower indigenous persons.
Under the legislation, foreign companies operating in the country are expected to cede 51 percent of their shareholding to locals.
Innscor Africa boasts of huge stakes in businesses such as National Foods, Irvine's, Chicken Inn, Baker's Inn, Creamy Inn, Nando's and Spar, among others.
In a letter addressed to Innscor Africa chief executive officer and director Mr John Koumides, National Indigenisation and Economic Empowerment Board (Nieeb) chief executive officer Mr Wilson Gwatiringa said Government's patience with the firm was running out.
He said the necessary action would be taken to nudge it towards full compliance with the law.
Mr Koumides refused to comment when contacted last Friday.
Part of the letter reads: "The Ministry (of Youth Development, Indigenisation and Empowerment) and Nieeb are losing patience with your unwillingness to move towards full compliance with the law.
"The company should have sought to comply within the time limits established by the law and this was not done.
"We, therefore, request that you submit a proper indigenisation implementation plan within seven days from receipt of this letter . . ."
Mr Gwatiringa also told Innscor Africa that its "indigenous" status was based on an erroneous understanding of what comprises an indigenous company.
He said Government was concerned about the group's list of directors and associated companies, which "show that over 99 percent of your directors are non-indigenous".
"A person can be Zimbabwean but not be indigenous. It is incumbent upon the company to submit a proper indigenisation plan," reads another section of the letter.
A senior Government official last week revealed that Innscor management undertook to fully comply with indigenisation requirements during a meeting with Government representatives late last year.
The official said it later turned out the firm had misled authorities into believing it was "indigenously owned to the extent of 81 percent".
"After we scrutinised the company's shareholders to verify their claim, we realised the company is only owned 5,17 percent by indigenous Zimbabweans," said the official.
"They gave an assurance that they will comply by the end of January. They are, however, yet to put that undertaking in writing."
Mr Gwatiringa last week confirmed writing the letter.
"Like any other company, we are expecting them to comply with our laws. Yes, we are engaging them so that their group will be in compliance with our laws," he said.
"It is simple; their companies need to comply as per the relevant sector of manufacturing. We are expecting them to submit their plan soon.
"We want their shareholding to reflect our laws." Zimbabwe passed the Indigenisation and Empowerment Act in 2008 as part of efforts to economically empower indigenous persons.
Under the legislation, foreign companies operating in the country are expected to cede 51 percent of their shareholding to locals.
Innscor Africa boasts of huge stakes in businesses such as National Foods, Irvine's, Chicken Inn, Baker's Inn, Creamy Inn, Nando's and Spar, among others.
Source - SM
