GOVERNMENT has given Hippo Valley Estates, a unit of South Africa-based Tongaat Hulett, less than two weeks to comply with the country’s laws, NewsDay has learnt.
Report by Bernard Mpofu
The National Indeginsation and Economic Empowerment Board last week wrote to Tongaat Hulett Zimbabwe chief executive officer Sydney Mtsambiwa ordering the firm to comply with the country’s equity law which compels foreign-owned companies to dispose of 51% stake to locals.
Hippo Valley, a Zimbabwe Stock Exchange-listed manufacturing concern, is 53,3% owned by Tongaat Hulett.
It is understood that government is pushing for Hippo Valley Estates to dispose of about 43% of its shares to indigenous Zimbabweans, among which will be the community trust at 10% and employee trust at 5%. “We request herein, as we have done before, that Triangle (Tongaat Hulett’s sugar operations in Zimbabwe comprise the wholly owned Triangle Sugar operation and its holding in Hippo Valley Estates) submit a compliant plan to the 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 letter.
“We would like to advise 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.”
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The indigenisation board, according to the letter, wants Triangle to participate in a community share ownership trust which government plans to launch within the next two weeks, primarily through the disposal of 10% of its shares.
Mutsambiwa has previously said the company’s $30m Successful Rural Sugarcane Farming Community (Susco) project, which has resulted in the financing of small scale sugar cane farmers, is part of the company’s compliance plans.
