JOHANNESBURG Stock Exchange listed Tongaat Hullet’s Zimbabwe operation, Triangle (Pvt) Ltd is seeking an urgent meeting with Indigenisation minister Saviour Kasukuwere to discuss compliance with the country’s Indigenisation Act, businessdigest has learnt.
Report by Taurai Mangudhla
Triangle is apparently yielding to pressure to meet Zimbabwe’s indigenisation requirements amid indications government could revisit the sugar firm’s land lease agreements as well as revoke its operating licence on account of its failure to respect the empowerment policy.
Highly-placed sources in the Indigenisation ministry say the company is trying to schedule a meeting by end of this week to deliberate on an acceptable compliance plan in terms of the law, which requires all foreign-owned companies to relinquish at least 51% shareholding to Zimbabwean locals.
“They have no choice but to comply,” said the source who requested not to be named.
The development comes at a time Triangle defied a National Indigenisation and Economic Empowerment Board (NIEEB) order in October that the company complies with the Indigenisation Act by November 6.
After taking into account challenges in the manufacturing sector, government has approved a schedule which requires foreign- owned manufacturing companies to dispose of 26% shareholding to indigenous Zimbabweans by end of October 2012 and the balance by October 2015.
Currently, only 6,7% of Triangle is in indigenous hands.
As a result, government is pushing for the company to dispose of 43% of its shares to indigenous Zimbabweans.Of this stake, 10% should be for the local community trust and 5% for the employees trust.
“We request herein, as we have done before, that Triangle submit a compliant plan to Ministry as soon as is possible and in any event not later than 14 days from receipt of this letter. We feel that we have afforded yourselves sufficient time within which to align with the requirements of law,” reads part of the October 23 letter.
“We would like to advice that the Ministry’s patience is running thin and that should we not receive a proper compliant plan within the prescribed period, Ministry and government would take it that the shareholders of Triangle are not interested in continuing to do business in the country. This may have serious consequences for the company. We trust that this however will not be necessary and look forward to a mutual resolution of the issues highlighted above.”
NIEEB argues Triangle has an obligation to participate in a community share ownership trust as it is involved in the exploitation of natural resources. Government intended to launch the trust by November 6, primarily through the disposal of 10% shares.
Triangle has previously argued its US$30 million Successful Rural Sugarcane Farming Community Project is part of empowerment compliance.
The company says about 670 private black farmers worked on 11 100 hectares and employed more than 5 550 people in Zimbabwe alone under the outgrower scheme.