International Mugabe ready to seize foreign firms Andrew Meldrum and Simon Bowers Law could force firms to hand over 51% of shares President Robert Mugabe's government is preparing to seize majority shares in all of Zimbabwe's foreign-owned businesses and mines, a move that economists warn would be as damaging as the widespread land seizures in the country. Top of the list of companies expected to be targeted are London-listed mining groups such as Rio Tinto and Anglo American, though recent remarks by Zimbabwean Ministers suggested banks such as Standard Chartered and Barclays could also be hit. One Minister said ``imperialist companies'' would be targeted as they had been operating with what the President described as a ``sinister, regime-change agenda'', according to reports. A senior source at one British company with a presence in Zimbabwe said any such move would ``confirm Mugabe as operating what is, to all intents and purposes, a terrorist regime''. Mr. Mugabe's Cabinet has approved proposed legislation to force all foreign-owned companies to cede 51 per cent of their shares to black Zimbabweans. The empowerment bill is going through a final drafting process before it is presented to Parliament, said top government officials. The Mugabe government has already drafted an amendment to the Mining Act, which requires all foreign-owned mines to have 51 per cent of their shares owned by ``indigenous'' Zimbabweans. In both proposed bills it is widely understood that the new black Zimbabwean shareholders would have to be closely tied to Mr. Mugabe's ruling party, Zanu-PF. Officials have said if companies cannot find acceptable indigenous Zimbabweans then the Government can make suggestions. Economists warn the actions would severely hurt Zimbabwe's already battered economy, which is suffering 3,700% percent inflation, the world's highest. Zimbabwe's economy has shrunk by 50% percent since 1999, an unprecedented contraction in a country not at war, according to the World Bank. The seizure of majority stakes in businesses and mines would increase inefficiency, mismanagement and corruption, according to many business executives, who point to the disastrous land seizures. Once a food exporter, Zimbabwe has been reliant on international food aid for six consecutive years. Independent analysts say the new moves are simply the latest example of Mr. Mugabe's plundering of the economy. ``Mugabe operates on a patronage system and he is running out of farms to give away to his supporters,'' said independent Harare economist John Robertson. ``Now he is looking for new areas of the economy to hand over. If this legislation becomes law, it will be like legalising theft. It will be a death knell to many companies.'' Cabinet approval of corporate seizure legislation has been widely anticipated by many multinational groups. British American Tobacco once counted Zimbabwe among its lead growers but has dramatically scaled down operations in the country. Rio Tinto sold off its gold and nickel mining operations to locally owned Rio Zim in 2003. - Guardian Newspapers Limited 2007
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