Home » Industry » Tongaat Prefers Empowerment Credits Over Equity Disposals

TONGAAT Hulett’s Managing Director, Sydney Mutsambiwa has called for the review of the country’s indigenisation and economic empowerment law saying it should focus on empowerment credits for sustainability compared to disposing of shareholding.

Mutsambiwa who was appearing before a parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment said the current liquidity situation obtaining in the economy does not favour equity disposal transactions.

“The implementation of indigenisation – with emphasis on the disposal of shareholding in an economy facing liquidity challenges instead of focusing on broad based empowerment on social and economically desirable activities – has unfortunately made it difficult to attract investments.

“Accordingly the indigenisation laws require review and focus should be on empowerment credits for sustainability,” he said.

Tongaat Hullet is still to comply with the 5149 percent shareholding structure, however Mutsambiwa said the company embraces empowerment and has over the years supported black sugar cane farmers.

“The company embraces black economic empowerment and has over the years supported black farmers and has been pursuing sustainable rural empowerment,” he said.

He said in the period from September 2011 to November 2014 the company has spent $2.982 mln on socio-economic activities which include projects associated with agricultural schemes.

Mutsambiwa said the company will develop about 4 000 hectares net cane area at a cost of $20 mln, funding of which would come from financial institutions. “Negotiations for funding are already under way.”

“We are looking at opening a net cane area of 3 393ha and already 203ha have been developed as part of the strategy to grow the outgrower scheme,” he said.

He added that the project will take 18 months to complete.

Meanwhile Mutsambiwa dismissed claims that the company financed a Zanu PF faction which had intentions to assassinate President Robert Mugabe.

He insisted that he worked with the deposed Kudakwashe Bhasikiti in his capacity as the Minister for State for Masvingo province and donated towards Zanu Pf’s congress which was held in December 2014.

Last month it was reported that VP Emmerson Mnangagwa had threatened the company with unspecified action after making sensational claims that Tongaat was working with the faction that wanted to remove President Mugabe from his position.

Source : Financial Gazette