Why is “Innscor Africa Limited” being left out of the Indigenisation Spot Light?

Published on the 24th of April 2012, by an Anonymous Writer.

“The Herald”, published on April 03 2012. PRIME Minister Morgan Tsvangirai described the empowerment drive as a noble programme meant to bring blacks into the mainstream economy following decades of marginalisation. He said blacks had for long been regarded as workers with the country’s resources under the control of the white minority.

“The indigenisation policy was put in place for Zimbabweans to be able to participate in businesses because for many years businesses were owned by whites and blacks were just workers,” he said.

“The indigenisation policy is meant for people to be free because if you do not own means of production, you remain workers.”

PM Tsvangirai said financial institutions should also be involved in the programme by lending money to indigenous people so that they can buy shares in companies.

Jonathan Chevenix, founding partner of African Century said that there was appetite for investment opportunities in Zimbabwe as the indigenisation process was totally normal. “It’s not the top of the tree when it comes to challenges. I would be worried if there was no indigenisation policy in the country because countries all over have that legislation,” Chevenix said.

“It’s all about how it is being executed. It’s about understanding the concept and knowing how the rules will be applied.”

Essential Definitions

According to the Indigenisation and Economic Empowerment Act, an “IndigenousZimbabwean” is defined as follows: “any person who, before the 18th April, 1980, wasdisadvantaged by unfair discrimination on the grounds of his or her race, and any descendantof such person, and includes any company, association, syndicate or partnership of whichindigenous Zimbabweans form the majority of the members or hold the controlling interest”.

14 (a) within the next five years from the 1st March, 2010, or within five years from thecommencement of your business, as the case may be, cede a controlling interest of notless than 51% of the shares or interests therein to indigenous Zimbabweans.

Sectors Reserved Against Foreign Investment in Favour ofIndigenous Zimbabweans

1. Agriculture: primary production of food and cash crops.

2. Transportation: passenger busses, taxes and car hire services.

3. Retail and wholesale trade.

4. Barber shops, hairdressing and beauty salons.

5. Employment Agencies.

6. Estate Agencies.

7. Valet services.

8. Grain milling.

9. Bakeries.

10. Tobacco grading and packaging.

11. Tobacco processing.

12. Advertising Agencies.

13. Milk processing.

14. Provision of local arts and craft, marketing and distribution.

Innscor is involved in a number of the earmarked sectors mentioned above.

National Foods Limited, Gold Seal, Nando’s, Steers, TV Sales & Home, Spar, Spar Express, Iris, Baker’s Inn, Capri, Irvine’s, Chicken Inn, Colcom, Creamy Inn, Pizza Inn, Shearwater, Zapnax, and Tops.

So why are we not hearing about Innscor becoming indigenised? Innscor is a public company that features in the top three of the Zimbabwe Stock Exchange regularly. So why are they not making an effort to become compliant? Why are they so different from other companies?

Zimplats, Implats and Meikles have made substantial efforts to meet the requirements of the Indigenisation and Economic Empowerment Act.

Zimplats was featured in “The Africa Report” posted on Thursday, 15 March 2012.

Zimplats Capitulation Props Up Mugabe's Election Campaign

By Janet Shoko in Harare

Zimbabwean President Robert Mugabe's elections machinery might just have received the tonic it needed, as a major mining company capitulated to his much maligned indigenisation policy.The world's second largest platinum mining company, Impala Platinum mines, finally bowed to pressure from Mugabe's government and agreed to cede 51 per cent of its shareholding in its subsidiary, Zimplats, to locals.

Implats Surrender Boosts Zimbabwe Zanu (PF) For Poll

Harare/Johannesburg, March 15, 2012.

A platinum miner's surrender to Zimbabwean demands for it to hand a majority stake in its local unit to black investors will embolden President Robert Mugabe's Zanu (PF) party to pressure other foreign companies before elections expected this year according to Reuters.

Other miners are likely be targeted to help fund the campaign of Zanu (PF), which controls the mines ministry in the uneasy coalition government, although analysts say the policy will portrayed as a blow to the remnants of white colonial rule.
South African-based Impala Platinum, the world's second largest platinum producer and the biggest foreign investor in the country, bowed on Tuesday to Zimbabwe's pressure to surrender a 51 percent stake in its Zimplats unit following months of argument.

Meikles Indigenisation Compliant

By RoadwinChirara, Business Writer, Harare, Saturday, 19 November 2011

Meikles Africa Limited (Meikles) has complied with Zimbabwe’s controversial indigenisation regulations after concluding a deal with government that gave its employees a 20 percent stake in the group.
Indigenisation minister Saviour Kasukuwere said his ministry had approved the deal.
“Yes, the company is now fully compliant and as ministry we are happy. The deal will also go a long way in empowering the youth through the fund which will be administered by the Infrastructure Development Bank (IDBZ) and Interfresh,” the minister said.

Whereas Innscor had this to say:

Innscor’s Comments from their Website.

Zimbabwe’s Indigenisation and Economic Empowerment Act enacted in March 2010 requiresall local enterprises to be 51% indigenous owned (indigenous as defined in the Act). There is still some uncertainty over how the Indigenisation Bill will be implemented exerting an element of political risk on the group. In addition the pending elections may lead to changes in the regulatory regime governing Innscor’s businesses. This may be of particular concern for a company operating in key industries such as food and food processing.

A reliable sourcetold me that in the eyes of the law, Greeks are not classified as indigenous; and only previously disadvantaged individuals prior to 1980 are classified as indigenous. Zed Koudounaris and Mike Fowlerare, therefore, not indigenous Zimbabweans. Theywerecertainly not previously disadvantaged.

The Minister Ministry of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere, made the example of who falls into the category of indigenised by using trees. “Msasa trees are indigenous and Gum trees are not”.

The shareholders of Innscor are listed below:

There are several anomalies with the shareholding figures above. They don't add up to 100% no matter which way you calculate them. There are36 831 185 shares floating around. Check the figures for yourself. A hint, subtract 196212525 from 233043710 and you get a lot of unaccounted for shares.

Which column do we put the shares into, Non Indigenous or Indigenous? I researched all the companies listed and I could not get any information about the company shareholdings. Are they each 51% compliant or not? I have presumed that most of them are, and yet, Innscor is still 66.48% non indigenous. Please, kind readers, help me to understand why this is.