Presented by Edwin Manikai & Chipo Sachikonye

PART I
ZIMBABWE INVESTMENT AUTHORITY

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INVESTMENT
Zimbabwe Investment Authority Act [Chapter 14:30]
(“the ZIA Act”) is the enabling legislation as it pertains to
foreign investment.
 Section 13
“Any person who wishes:-
(a) to obtain the approval of the Authority to invest in
Zimbabwe; or
(b) his or her business activity to be approved by the
Authority as a foreign investment;
Shall submit an application to the Authority for an
investment licence with such application accompanies by
a prescribed fee.
Standard documentation to accompany a ZIA application:-
Three year financial forecast of the project;
Proof of funds;
Business plan;
Environmental impact assessment report (if in mining);
Cv of each director ;
Details of shareholding of the company etc
Fee is US$1000.00 on submission of the application and
US$2 000 on approval of the investment and processing
of the licence.

Once issued an investor has to implement the project

within a period of six months ; or risk cancellation,
suspension or withdrawal of the licence by the Authority
(section 5 (2) of the Regulations SI 160 of 2007)
 KEY HIGHLIGHTS
• A licence is valid for a definite period fixed by the Board.

• Renewal of the application shall be in the form of a letter

specifying the request for extension and made at least 3
months before expiry of the licence and shall cover the
following:-
• Company structure – shareholding;
• Project status
• (a) location
• (b) ZIA approval date
• ( c) Project description
• PROJECT FINANCING TO DATE
• Indicating investment made by the company to date
(attach proof of investment)
Statutory obligations being met by the company e.g
ZIMRA, ZIMDEF, NSSA; (attach supporting
documentation
Employment creation (attach register of employees)
Challenges being faced by the company; and
Opportunities for the company.

One is to submit the letter with US$1 000.00 renewal fee.

Why apply for a licence?
• The investment obtains the protection of the laws of
Zimbabwe

• Section 32 “the property or interest or right of every

licensed investor to whom an investment licence has been
issued in terms of this Act shall be accorded every
protection afforded by the laws of Zimbabwe.

• Incentives in terms of section 24 of the ZIA Act which can

only be granted to licensed investors;
NB. Reserved Sectors
Second Schedule – Sectors reserved for domestic investors
Agriculture Forestry-
Primary production of food and cash crops
Primary horticulture
Fishing and fish farming
Other than agro- industry involving post growth
processing
Transportation
Estate agencies etc.
Q: DOES A ZIA LICENCE OFFER ANY REAL
BENEFITS TO AN INVESTOR?
 PART II
EXCHANGE CONTROL

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EXCHANGE CONTROL
Exchange Control Act

Foreign Exchange Guidelines

External Loans Coordination Committee Guidelines

Reserve Bank Directives

• Investment in Unlisted Companies
– Foreign investors may invest up to 40% in unlisted
companies for existing projects and Exchange Control
approval shall be sought for such investment.

• Investment in Listed Companies

– The purchase of shares shall be limited to 40% of the total
equity of the company with a single investor acquiring a
maximum of 10% of the shares on offer.
No prior Exchange Control approval will be necessary for
foreign investors wanting to participate on the ZSE;
 External Loans Co-ordination
Committee - ELCC
Formed in early 1980 to implement an effective debt
management policy by sanctioning and monitoring all
new loan commitments undertaken by all sectors of the
economy.

The ELCC derives its powers from the Reserve Bank Act,
Exchange Control Act and the State Loans and Guarantee
Act.
All external loan and commercial credit proposals
regardless of the amount – for both private sector and
parastatals shall be subject to ELCC approval.

All external loans for financing export oriented projects.

No external borrowing shall be approved by ELCC and
Exchange Control to finance non-productive activities,
including:-
Purchase of houses/property/real estate;
Purchase of shares/securities/portfolio;
Purchase/acquisition of an existing company asset;
Private consumption/personal loans e.g motor vehicles.
Financing of commodity broking.
• The above cannot be financed even from existing lines of
credit arranged by authorised dealers and globally
approved by ELCC as import finance.

• All application to ELCC will only be considered provided

the applicants are in compliance with Exchange Control
rules and regulations.
All external loans which are approved by the ELCC or
Exchange Control must be registered with the ELCC
Secretariat as soon as the loan agreements are signed –
specimen term sheet must accompany the signed loan
agreement
 EXCHANGE CONTROL
DIRECTIVE :08/2013
Approval limit of external loans/and or trade credits has
been reviewed from US$5 million to US$1 million.

All external private or public loans from US$1 million

and above shall now require prior ELCC approval.
• Offshore loans may be securitized with immovable
property.
• Applications for securitization with immovable property
are submitted to Exchange Control and supported by the
following:-
details of the borrower and current debt exposure;
duly signed loan agreement;
 ELCC approval for offshore loans in excess of US$1
million;
 Authorised dealer approval and reference number for
offshore loans less than US$1 million;
 Valuation of the asset being offered as security by a
reputable valuation company;
 Board resolution from the borrower; and
 Cash flow projections.
The following conditions apply to securitization using
immovable property:-
the debt cover ratio (i.e. value of the asset and the loan
amount) shall not be more than one and half (1.5) times the
loan amount.
In the event of the need to liquidate the asset, the right of
first refusal to acquire the asset shall be given to
Zimbabwean residents
NB….

Securitization of offshore loans using securities and

mineral claims shall also require prior Exchange Control
approval.
NB…
• Dividends: exchange control approval is note required for remittance
of dividends to foreign shareholders in the company. Notification is
required and made by the authorized dealer.

– The company notifies the bank of the dividend payment to be made to

the foreign shareholder ;
– together with a copy of the board resolution, bank statements of the
company and auditors certificate confirming that the company has made
a profit;

Profit sharing arrangements require exchange control approval.

• Management Agreements: must be registered with exchange control.

Once registered remittances can be made under the agreement using
the exchange control registration number given to the agreement.
 PART III
INDIGENISATION

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 INDIGENISATION

THE MOVE FROM EQUITY TO EMPOWERMENT

 “empowerment” means the creation of an environment which enhances the

performance of the economic activities of indigenous Zimbabweans into
which they would have been introduced or involved through indigenization;
 BACKGROUND
 
• The Indigenisation and Economic Empowerment Act [Chapter 14:33] (“the
Indigenisation Act” or “The Act”) is an act which finds its source from
section 14 of the Constitution of Zimbabwe (Amendment No.20) which
provides that:-
 
• “the State and all institutions and agencies of government at every level
must endeavour to facilitate and take measures to empower through
appropriate, transparent, fair and just affirmative action, all marginalised
persons, groups and communities in Zimbabwe. ”
 
• Indigenisation is therefore a constitutional imperative, and the Government
policy is set in the Act and Regulations as amended. As a preface to the
discussion of the various options available to a private corporation in
Zimbabwe, it is necessary to give an outline of the Act and the Regulations.
 

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 THE ACT
 
• Definitions which are key to the interpretation of the Act are:-

 “business” means any company, association, syndicate or partnership of persons

that has for its object the acquisition of gain by the company, association, syndicate
or partnership, or by the individual members thereof, whether the business is
registered in terms of the Companies Act [Chapter 24:03] or otherwise;

 “controlling interest” in relation to:-

• A company, means the majority of the voting rights attaching to all classes of shares in
the company;

• Any business other than a company, means any interest which enables the holder thereof
to exercise, directly or indirectly, any control whatsoever over the activities or assets of
the business;

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 “empowerment” means the creation of an environment which enhances
the performance of the economic activities of indigenous Zimbabweans
into which they would have been introduced or involved through
indigenization;

 “indigenisation” means a deliberate involvement of indigenous

Zimbabweans in the economic activities of the country, to which hitherto
they had no access, so as to ensure the equitable ownership of the
nation’s resources;

 “indigenous Zimbabwean” means any person who before the 18th of

April 1980, was disadvantaged by unfair discrimination on the grounds
of his or her race, and any descendant of such person, and includes any
company, association, syndicate or partnership of which indigenous
Zimbabweans form the majority of the members or hold the controlling
interest.

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 THE POLICY
 
• The over-arching principle of the Act is contained in section 3 of the
Act which deals with the “objectives and measures in pursuance of
indigenisation and economic empowerment”
 
• Section 3(1) provides:-
 
• “the Government shall, through this Act or regulations or other
measures under this Act or any other law, endeavor to secure that:-
 
In terms of section 3 (1) (a):-
• at least 51% of the shares of every public company and any other
business shall be owned by indigenous Zimbabweans;
 

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 In terms of section 3 (1) (b)
 no-
 (i) merger or restructuring of the shareholding of 2 or more related or
associated businesses; or
 (ii) acquisition by a person of a controlling interest in a business;
 that requires to be notified to the Competition Commission in terms of
Part IVA of the Competition Act [Chapter 14:28] shall be approved
unless:–
 (iii) 51% (or such lesser share as may be temporarily prescribed for the
purpose of subsection (5)) in the merged or restructured business is held
by indigenous Zimbabweans; and
 
 (iv) the indigenous Zimbabweans referred to in subparagraph (iii) are
equitably represented in the governing body of the merges or
restructured entity.”

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• 3 (1) (d) “no relinquishment by a person of a controlling
interest in a business, if the value of the controlling interest is
at or above a prescribed threshold, shall be approved unless
the controlling interest (or such lesser share thereof as may
be temporarily prescribed for the purposes of subsection (5) is
relinquished to indigenous Zimbabweans; (our emphasis)

• 3 (1) (e) “no projected or proposed investment in a prescribed

sector of the economy available for investment by domestic or
foreign investors for which an investment licence is required
in terms of the Zimbabwe Investment Authority Act (“ZIAA”)
[Chapter14:30] shall be approved unless a controlling interest
in the investment (or such lesser share thereof as may be
temporarily prescribed for the purposes of subsection (5)) is
reserved for indigenous Zimbabweans.”

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• In terms of section 5 the Minister can exercise his
discretion and allow the “non-compliance” by the non-
indigenous entity, but only for a specified time period:-

• “the Minister may prescribe that a lesser share than

51% or a lesser interest than a controlling interest may
be acquired by indigenous Zimbabweans in any
business referred to in subsections (1) (b) (iii), 1(c) (i)
and (1) (d) and (e) in order to achieve compliance with
those provisions, but in so doing he or she shall
prescribe the general maximum timeframe within which
the 51% share or the controlling interest shall be
attained.”

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 CONSIDERATIONS OTHER
THAN SHAREHOLDING
• In terms of the Regulations, when assessing indigenisation
compliance, the Minister can give a company credits towards
meeting their indigenisation quotas for socially and
economically desirable objectives. Further, the Minister can
approve a threshold of less than 51% or extend the period for
compliance beyond 5 years on good and sufficient cause being
established that there exist other socially and economically
desirable objectives.

• Section 3 (a) specifically states the following:-

 
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 “…unless, in order to achieve other socially or economically desirable
objective, a lesser share or indigenisaiton or a longer period within
which to achieve it is justified.”
 
 The Mining Sector has specific regulation that relate to the sector which
are contained in the mining regulations pertaining to Indigenisation
General Notice 114/2011.
 

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THE REGULATIONS
• The Indigenisation and Economic Empowerment (General)
Regulations, 2010, Statutory Instrument 21 of 2010, (S.I. 21 of
2010) as read together with the amendment to the regulations
Statutory Instrument 116 of 2010 (S.I. 116 of 2010) (together
“the Regulations”) deal with the implementation of the
provisions of the Act. Definitions which are relevant for the
purposes of interpretation of the regulations are:-
 
“indigenisation plan” means a written proposal to
the Minister on how and when 51% or a controlling
interest in any business shall fall under the control of
the indigenous Zimbabweans;
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 “minimum indigenisation and empowerment quota” means a
controlling interest or the 51% of the shares or interests which in
terms of the Act is required to be held by indigenous Zimbabweans
in a business pursuant to any transaction referred to in sections
three, four, six, seven (1) nine and 11;

 “qualifying scheme or trust “ means an employee share

ownership scheme or trust that qualifies in terms of section twelve
for the purposes of being used to assess the extent to which a
business that is a company has achieved or exceeded the minimum
indigenisation and empowerment quota.

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 “management share ownership scheme or trust”
means an arrangement the dominant purpose or
effect of which is to enable the managerial
employees of a company or group of companies to
participate in or receive profits or income arising
from the acquisition, holding, a management or
disposal of the stock, shares or debentures of the
company or group of companies concerned:

Provided that a management share ownership scheme or

trust shall not include a share option scheme operated for the
benefit of any managerial employee;

“managerial employee” means a person of any

one or more of the following descriptions:

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• Any person who is the principal executive officer, corporate
secretary, chief financial officer or human resources
manager of a business, by whatever title he or she may be
designated and whether or not, in the case of a company, he
or she is a director;

• Any employee of a company who, in the discharge of his or

her functions, is directly answerable to the board of
directors of a company;

• Any employee whose contract of employment requires or

permits him or her to hire, transfer, promote, suspend, lay
off, dismiss, reward, discipline or adjudge the grievances of
other employees;

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  “net asset value” in relation to the net asset value of a business,
means its net worth, that is to say the total value of its fixed assets
and other assets less the total value of its liabilities;

 “sector of the economy” “subsector of the economy” and

“sectoral” refer to a sector or subsector of the economy specified
in the first or second column of the Table appearing under item 3
of Form IDG 01;
 
 “share option scheme” means an arrangement to benefit
employees of a company whereby shares are offered to them for
purchase at a future date at a price fixed in advance.

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• A key amendment was the replacement of the word “cede”
with the word “dispose of”. The Act therefore now
contemplates a transfer of shares for value, rather than a
disposal for no value. The words “dispose of” are in turn
defined to mean to “sell, donate or otherwise dispose” in
section 2 of SI 116 of 2010.

• “Asset value” was replaced by the term “net asset value”

which gives more precision on the businesses affected by
the regulations. The term “net asset value” is defined in
section 2 of SI 116 of 2010 as:

“in relation to the net asset value of a business, means its net
worth, that is to say, the total of its fixed assets and other
assets less the total value of its liabilities”.

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EMPLOYEE SHARE OWNERSHIP
SCHEMES OF TRUST
• Section 14 of the Indigenisation Regulations deal with
employee share ownership schemes. Section 14(1)
provides the following:-

“An employee share ownership scheme or trust that

complies with this section shall be taken into
consideration when assessing the extent to which a
business that is a company has achieved or exceeded the
minimum indigenisation and empowerment quota.”

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• In terms of section 14(2) to 14(5) of the Regulations:
 
“(2) a qualifying scheme or trust under this section shall –
not benefit managerial employees to an extent exceeding five
per centum of the shares or interests pooled in the employee
share ownership scheme or trust; and

be constituted by a Deed of Trust registered with the Deeds

Office, and shall specify the actual percentage of the shares
or interest in the business to be held by or on behalf of the
employees of the business, which percentage shall be added
towards the fulfilment of the minimum indigenisation and
empowerment quota.

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 COMMUNITY SHARE
OWNERSHIOP SCHEMES
• Section 14B (1) refers to community share ownership schemes,
this scheme is defined as follows:-

“community” means-

• The residents of the Rural District Council established in terms

of the Rural District Councils Act [Chapter 29:13] whose natural
resources are being exploited by a qualifying business; or

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The residents of one or more wards of a Rural District
Council specified in a community share ownership scheme
whose natural resources are being exploited by a qualifying
business; or

Any other distinct community of persons as defined in a

community share ownership scheme, who are affected by
the exploitation of the natural resources in or adjacent to
their place of residence.

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 –
natural resources”, include-
“

• the air, soil, water and minerals of Zimbabwe;

 
• the mammal, bird, fish and other animal life of Zimbabwe;
 
• the trees, grasses and other vegetation of Zimbabwe;
 
• the springs, vleis, sponges, reed-beds, marshes, swamps
and public streams of Zimbabwe;
 

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any landscape, scenery or site having aesthetic appeal or scenic
value or of historic or archaeological interest;
 
 “qualifying business” means a company engaged in
exploiting the natural resources of any community;

 “ward” means an area defined as a ward under the Rural

District Councils Act [Chapter 29:13].

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• A community share ownership scheme or trust that complies with
this section may be taken into consideration when assessing the
extent to which a business has achieved or exceeded the
minimum indigenization and empowerment quota.

• A community share ownership scheme or trust shall be

constituted by a Deed of Trust registered with the Deeds office
and shall, subject to subsection (4), have the following features-

• in the case where the beneficiary community are the residents of a

Rural District Council, the Rural District Council shall have the
right to appoint the trustee or trustees who will hold the shares or
interest in the qualifying business on behalf of the community
(the actual percentage of which shares or interest shall be added
towards the fulfilment of the minimum indigenization and
empowerment quota); or

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• in the case where the beneficiary community are the residents of
one or more wards of a Rural District Council, the manner of
appointment of the trustee or trustees who will hold the shares or
interest in the qualifying business on behalf of the community (the
actual percentage of which shares or interest shall be added
towards the fulfilment of the minimum indigenization and
empowerment quota) shall be as agreed between the Rural District
Council concerned and the qualifying business; or

• in the case where the beneficiary community are the members of a

distinct community of persons as defined in a community share
ownership scheme, the manner of appointment of the trustee or
trustees who will hold the shares or interest in the qualifying
business on behalf of the community (the actual percentage of
which shares or interest shall be added towards the fulfilment of
the minimum indigenization and empowerment quota) shall be as
set out in the Deed of Trust of the community share ownership
scheme or trust concerned.

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• An owner of a business wishing to use the qualifying scheme or
trust for the purpose of this section shall submit to the Minister
Form IDG 04 together with a copy of the Deed of Trust of the
qualifying scheme or trust.
 
• Provided that, in considering whether a community share
ownership scheme or trust set up for the benefit of a community
referred to in subsection (3) (a) or (b) should be accepted as a
qualifying scheme or trust, the Minister shall have regard to
whether the scheme or trust provides that the monies accruing to
the scheme or trust will be applied to any or all of the following
purposes-
 
• the provision, operation and maintenance of –
 
• schools and other education institutions and facilities and
amenities connected therewith, and educational scholarships; and
 

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 hospitals, clinics and dispensaries; and

 the provision and maintenance of dipping tanks; and

 
 the provision, development and maintenance of roads; and
 
 the provision, development and maintenance of water works and
water sanitation works; and
 
 fully reclamation and other works related to soil conservation and
the prevention of soil erosion, and the conservation of the
environment generally.

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• All dividends or other monies accruing to the beneficiaries by virtue of a
community share ownership scheme or trust in terms of this section shall-
 
• in the case of a community referred to in subsection (3)(a) or (b), be
recorded in separate account of the Rural District Council concerned, as
will ensure that the amount of such dividends or other monies may be
ascertained separately from any other revenue accruing to the Rural
District Council;

• in the case of a community referred to in subsection (3) (c), be credited

and disbursed in the manner set out in the Deed of Trust of the
community share ownership scheme or trust concerned.”
 
• The amendments to the Regulations, as outlined above, provide greater
options to a corporate entity with regards to mechanisms to reach the
51% threshold in the event that the entity does not want to concentrate
power in one indigenous partner’s hands.

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 ASSESSMENT
• Assessment for compliance with indigenisation laws is done on a yearly
basis. The company is obliged to complete and submit the Form IGD 03
and submit same to the Minister. These forms are completed and submitted
to the Minister, upon his making a notice in the Government Gazette that
businesses submit their indigenisation and empowerment ratings.

• It is apparent from the definition of “controlling interest” that the concept of

non-voting shares is not recognized nor permitted in the Zimbabwean
context.

• Section 17 of the Act prohibits fronting. The section provides the

following:-

• “Any person who, when providing information in connection with a

transaction referred to in sections six, seven, eight, nine or eleven, wilfully
misrepresents-

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 That he or she or any person in respect of whom he or she furnishes
the said information is an indigenous Zimbabwean;
 The extent to which any ownership interest is held by indigenous
Zimbabweans; or
 That he or she is owner of any shares or other interest in a business,
knowing that he or she is merely the nominee of the beneficial owner
who is not indigenous Zimbabwean;

 Shall be guilty of an offence and liable to a fine not exceeding level

twelve or imprisonment for a period not exceeding five years or to
both such fine and such imprisonment.”

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 PART IV
COMPETITION AND TARIFF COMMISSION

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 The key question to ask on a transaction is whether or not the transaction
requires notification and approval of the Competition and Tariff
Commission (“the Competition Commission” or “CTC”) and whether or
not the transaction will result in a monopoly situation, requiring the
approval of the Competition Commission.

 A merger/acquisition/amalgamation requires notification and approval of

the Competition Commission in terms of section 34A of the Competition
Act [Chapter 14:28] (“the Competition Act”).

 Key Definitions relevant to investments and acquisitions are:-

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 “controlling interest ”, in relation to—
(a)  any undertaking, means any interest which enables the holder
thereof to exercise, directly or indirectly, any control whatsoever over
the activities or assets of the undertaking;
(b)  any asset, means any interest which enables the holder thereof to
exercise, directly or indirectly, any control whatsoever over the
asset;”
 
 “ merger ” means the direct or indirect acquisition or establishment
of a controlling interest by one or more persons in the whole or part
of the business of a competitor, supplier, customer or other person
whether that controlling interest is achieved as a result of—
(a)  the purchase or lease of the shares or assets of a competitor,
supplier, customer or other person;
(b)  the amalgamation or combination with a competitor, supplier,
customer or other person; or
(c)  any means other than as specified in paragraph (a) or (b); and

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 “monopoly situation” means a situation in which a single person exercises,
or two or more persons with a substantial economic connection exercise,
substantial market control over any commodity or service;
 
 Section 34 A of the Competition Act provides the following with regards to
Notifiable Mergers
 
“(1) A party to a notifiable merger shall notify the Commission in writing
of the proposed merger within 30 days of—
(a)  the conclusion of the merger agreement between the merging parties;
or
(b) the acquisition by any 1 of the parties to that merger of a controlling
interest in another.”

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 Notification to the commission is effected by completing a Merger and
Notification Form, which form must be accompanied by the
prescribed fee in terms of section 34A (2).

 In terms of section 34A (3)

 
“ The Commissioner may impose a penalty if the parties to a merger—
(a)  fail to give notice of the merger as required by subsection (1);
(b)  proceed to implement the merger without the approval of the
Commission as required by subsection (2).”

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 A penalty imposed in terms of section 34A (3) may not exceed 10%
of either or both of the merging parties’ annual turnover in Zimbabwe
as reflected in the accounts of any party concerned for the preceding
financial year.

 In terms of section 34A (5) when determining an appropriate penalty,

the Competition Commission considers the following factors—
 
“(a)  the nature, duration, gravity and extent of the contravention;
and
(b)  any loss or damage suffered a s a result of the contravention; and

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(c)  the behaviour of the parties concerned; and
(d)  the market circumstances in which the contravention took place;
and
(e)  the level of profit derived from the contravention; and
(f)  the degree to which the parties have co-operated with the
Commission ; and
(g)  whether the parties have previously been found in contravention
of this Act.”

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 In terms of section 34A (6) civil proceedings for the recovery of any
penalty imposed in terms of subsection (3) may be brought against the
party or parties concerned by the Competition Commission.

Monopoly Situations
 
 Section 28 of the Competition Act gives the Competition Commission
the power to make such investigation as it considers necessary into any
monopoly situation which the Competition Commission has reason to
believe exists or may come into existence.

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 In terms of section 30 of the Competition Act, the Competition Commission
may at any time (whether or not it has actually embarked on an
investigation into the restrictive practice, merger or monopoly situation)
negotiate with any person with a view to making an arrangement which
will:-

“(a)  ensure the discontinuance of any restrictive practice which exists or

may come into existence; or
(b)  terminate, prevent or alter any merger or monopoly situation which
exists or may come into existence;”
 
 In terms of section 30 (2) the Competition Commission may embody the
arrangement in an order.

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 Section 31 (2) provides that if the Competition Commission is satisfied, that
any actual or proposed merger or monopoly situation is or will be contrary
to the public interest, the Competition Commission may make any one or
more of the following orders in respect of that merger or monopoly
situation:-

“(a)  declaring it to be unlawful, except to such extent and in such

circumstances as may be provided by or under the order, to make or to
carry out any agreement or arrangement which is specified in the order
and which, in the Commission’s opinion, will lead to or maintain the
merger or monopoly situation;

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(b)  in the case of a monopoly situation, requiring any person who exercises
control over the business or economic activity concerned to take such steps
as are specified in the order to terminate the monopoly situation within
such time as is specified in the order;
(c)  prohibiting or restricting the acquisition by any person named in the
order of the whole or part of any undertaking or assets, or the doing by that
person of anything which will or may result in such an acquisition, if the
acquisition is likely, in the Commission’s opinion, to lead to a merger or
monopoly situation;
(d)  requiring any person to take steps to secure the dissolution of any
organization, whether corporate or unincorporated, or the termination of
any association, where the Commission is satisfied that the person is
concerned in or a party to the merger or monopoly situation;

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(e)  requiring that, if any merger takes place or any monopoly
situation exists, any party thereto who is named in the order shall
observe such prohibitions or restrictions in regard to the manner in
which he carries on business as are specified in the order;

(f)  generally, making such provision as, in the opinion of the

Commission, is reasonably necessary to terminate or prevent the
merger or monopoly situation, as the case may be, or alleviate its
effects.”

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 An order made in respect of a merger or monopoly situation may provide
for the following in terms of section 31 (3):-
“(a)  the transfer or vesting of property, rights, liabilities or obligations;
(b)  the adjustment of contracts, whether by their discharge or the reduction
of any liability or obligation or otherwise;
(c)  the creation, allotment, surrender or cancellation of any shares, stocks
or securities;
(d)  the formation or winding up of any undertaking or the amendment of
the memorandum or articles of association or any other instrument
regulating the business of any undertaking.”

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 In terms of section 32 the Competition Commission when determining
whether or not a monopoly situation will be contrary to the public interest
shall have regard to the desirability of :-

“(a)  the transfer or vesting of property, rights, liabilities or obligations;

(b)  the adjustment of contracts, whether by their discharge or the reduction
of any liability or obligation or otherwise;
(c)  the creation, allotment, surrender or cancellation of any shares, stocks
or securities;
(d)  the formation or winding up of any undertaking or the amendment of
the memorandum or articles of association or any other instrument
regulating the business of any undertaking.”

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 In terms of section 32 (5) the Competition Commission shall regard a
monopoly situation as contrary to the public interest unless the Competition
Commission is satisfied as to any one or more of the following :-

“(a)  that the monopoly situation, through economies of scale or for other
reasons, has resulted in or is likely to result in a more efficient use of
resources in any business, trade or industry than would be the case if the
monopoly situation did not exist;
(b)  that the monopoly situation is or is likely to be necessary for the
production, supply or distribution of any commodity or service in
Zimbabwe, regard being had on the one hand to the resources necessary to
produce, supply or distribute the commodity or service and, on the other
hand, to the size of the Zimbabwean market for that commodity or service;

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that termination or prevention of the monopoly situation would deny to
consumers or users of any commodity or service, other specific and
substantial benefits or advantages enjoyed or likely to be enjoyed by
them, whether by virtue of the monopoly situation itself or by virtue of
any arrangement or operation resulting therefrom;
(d)  that the monopoly situation is or is likely to be reasonably
necessary to enable the parties to it to negotiate fair terms for the
distribution of a commodity or service—
(i)  from a person who is not a party to the monopoly situation and
who exercises complete or, substantial control over the distribution of
the commodity or service or

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(ii) to a person who is not a party to the monopoly situation and who
exercises complete or substantial control over the market for the commodity
or service;
(e)  that termination or prevention of the monopoly situation would be
likely to have a serious and persistently adverse effect on the general level
of unemployment in any area in which a substantial proportion of the
business, trade or industry to which the monopoly situation relates is
situated;
(f)  that termination or prevention of the monopoly situation would be
likely to cause a substantial reduction in the volume or earnings of any
export business or trade of Zimbabwe.”

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QUESTIONS

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CONCLUSION

&

THE END

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