The FMI Zimbabwe acquisition of BP and Shell Marketing Services (BPSMS) assets may be revisited by the Competition and Tariff Commission (CTC) as it has emerged FMI is yet to fulfil part of the conditions of the transaction.
CTC chairman Dumisani Sibanda yesterday told the Parliamentary Portfolio Committee on Industry and Trade the deal sailed through in 2011 and was approved by both the commission and the Indigenisation ministry.
He said since the approval of the deal there have been concerns raised by members of the public. We are aware of the concerns and notifications had been made to the Minister of Indigenisation, said Sibanda.
When we find out that our conditions were not met, we will go back to the conditions, he said.
The concerns have been raised by the public of FMI failing to fulfil the conditions, but the challenge is no order has been registered with the High Court. FMI has to honour all current arrangement with dealers working with BP and Shell assets for their operations, said another CTC official before the same committee.
Part of the deal was that Masawara will institute a 10% employee share ownership scheme. It has, however, not yet done so.
Early last year FMI Energy parent company Masawara completed the acquisition of 100% BPSMS.
The consideration for the acquisition was $30 million and financed through a combination of $8,2 million of cash resources available to Masawara and third-party debt-funding arrangements.
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As an investment company, Masawara is not intending to undertake operating activity, Masawara said then.
As such, the equity investment will be diluted through a combination of the following measures the introduction of financial and technical partners; the introduction of an employee share ownership scheme; and the implementation of other economic empowerment initiatives. BPSMS is a long-established importer and distributor of petroleum products in Zimbabwe.
In October last year, Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere urged FMI Energy Zimbabwe to comply with the indigenisation regulations by setting up an employee share scheme.
Fuel dealers and former employees wrote to Kasukuwere last year raising concern over unfair business practices by FMI Energy Zimbabwe. We are making sure that the commitment made at the purchase of BP assets is met, said Kasukuwere.
We would like to see the ownership by the employees and the agreed steps in the agreement must be implemented. We have received the complaints and they are under consideration.
