Zimbabwe reduces penalties on ownership transfer law

Zimbabwean Prime Minister Morgan Tsvangirai

Zimbabwe reduces penalties on ownership transfer law

Zimbabwe government has reduced penalties for foreign companies that violate a government mandate to sell a majority of their shares to locals.

According to a government notice obtained on Thursday, penalties for offences including falsifying shareholdings and company valuations will range from three to twelve months in jail, down from the previous five years imprisonment.

Government’s condition

The country said it has given foreign-owned mines up to September 30 to transfer a majority shareholding to local blacks under a 2008 law driven by President Robert Mugabe's ZANU-PF party.

Meanwhile, analysts have said that Zimbabwe does not have the money to pay for majority stakes in the mining firms and is likely using the ownership laws as a way to extract concessions and cash from foreign companies looking to tap into the resource-rich country's mineral wealth.

Reports say Mugabe's administration set up the law two years ago after a disputed 2008 election.

However, Prime Minister Morgan Tsvangirai, has criticised the law, saying it threatens the country's fragile economic recovery.

REUTERS/Shakira/Williams