Zimbabwe, Old Mutual reach deal on equity law

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Zimbabwe has reached a deal with insurance group Old Mutual on how the company will comply with a law compelling foreign companies to sell majority stakes to local blacks, a minister said Wednesday.

"Old Mutual has reached an agreement... towards the implementation and compliance" with the law, indigenisation minister Saviour Kasukuwere told a news conference.

The agreement allows British insurer Old Mutual to conduct a "first phase" of compliance which will see the firm place 25 percent of its local subsidiary in the hands of black Zimbabweans.

The shares will be awarded as grants, mainly to pensioners and staff, but also to partners and a youth development fund, Kasukuwere said.

Foreign firms face a Sunday deadline to submit plans on how they will comply with the law, which requires black Zimbabweans to hold at least 51 percent stakes in the companies.

The minister did not saw how the firm would comply with the remainder of the equity requirement.

The law has caused anxiety among foreign investors and division in Zimbabwe's power-sharing government between President Robert Mugabe and long-time rival Prime Minister Morgan Tsvangirai.

© 2011 AFP

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