March 31, 2016 / 6:31 PM / 3 years ago

Zimbabwe says foreign banks, miners fail to comply on selling stakes to locals

* Zhuwao says banks have not shown intention to comply

* Banks, mines seen complying within two weeks

* Finance Minister says will not seize companies

HARARE, March 31 (Reuters) - Most foreign banks and mining companies in Zimbabwe have not complied with Thursday’s deadline to transfer majority shares to locals, a government minister said, but added that he expected them to start to do so within the next two weeks.

Under Zimbabwe’s Indigenisation and Economic Empowerment Act all foreign companies must sell at least 51 percent of their holdings by March 31, part of President Robert Mugabe’s black empowerment drive.

Companies that do not meet the deadline will have their operating licences cancelled from April 1, Youth and Economic Empowerment Minister Patrick Zhuwao said last week.

Foreign banks in the south African country include Standard Chartered Plc, Barclays Plc and South Africa’s Standard Bank Ltd while Anglo American Platinum and Impala Platinum are among big mining companies with operations there.

Finance Minister Patrick Chinamasa, however, said no companies would be seized, dismissing local media reports that the government would punish directors of foreign companies that fail to adhere to the empowerment law by seizing their personal assets.

Zhuwao, a nephew of President Mugabe, told youths from the ruling ZANU-PF party that foreign-owned banks were resisting adhering to the law, known locally as indigenisation.

Reserve Bank of Zimbabwe Governor John Mangudya had been quoted by the state-owned Herald newspaper on Thursday as saying that foreign banks had complied or were in the process of complying with the law, but Zhuwao said Mangudya’s comments were not correct.

“Those companies are not compliant and those companies have not shown an intention to comply,” Zhuwao told reporters, but declined to name the banks.

“Its unfortunate that I have to make a correction in public,” he said, referring to Mangudya’s comments.

Foreign investors often point to such contradictions among Zimbabwean authorities as an obstacle to investment.

Mangudya could not be reached for further comment.

Zhuwao said there were “small hurdles” that had to be resolved for mining and financial services firms to comply.

“Once we solve these hurdles, in particular - its small hurdles within the financial services sector and mining sector - we won’t see non-compliance two weeks from today,” he said, without elaborating. (Reporting by MacDonald Dzirutwe; Editing by Susan Fenton)

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