Sovereign wealth fund of Zimbabwe renamed ‘Mutapa investment fund’

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The regulations make substantial amendments to the Sovereign Wealth Fund of Zimbabwe Act [Chapter 22:20] to repeal the Sovereign Wealth fund of Zimbabwe and substitute it with a new sovereign wealth fund known as the Mutapa Investment Fund.

Below are some highlights of the key features of the amendments relating to the powers and assets of the new Mutapa Investment Fund.

Under section 11:

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(2) The Board shall apply the monies of the Fund to the fulfilment of the Fund’s objects.
(3) Moneys of the Fund not immediately required to fulfil the Fund’s objects may be invested in such a manner as the Board considers appropriate.
(4) The shares held by the Government of Zimbabwe (whether in the name of the Government or on its behalf by any named Minister or Ministry) in the companies listed in the Fourth Schedule shall on the date of commencement of these regulations vest in and form part of the initial capital of the Fund without any transfer, conveyance or other instrument:
(5) No later than twenty-one days after the commencement of these regulations, the directors, corporate secretaries or transfer secretaries, as the case may be, of the companies listed in the Fourth Schedule, shall—
(a) effect the necessary changes to the appropriate share registers to reflect that the Fund is the holder of the shares in question; and
(b) deliver to the Chief Executive Officer the appropriate share certificates issued in the name of the Mutapa Investment Fund: Provided that the failure to comply with this subsection shall not be a ground for impeaching the title of the Fund to the shares in question.
(6) The President may, for the sake of public information, and after consulting the Board, by notice in a statutory instrument amend the Fourth Schedule by adding, deleting or substituting any assets therein, or may replace the Schedule entirely.

Under section 12:

20A Transfer of funds
(1) With respect to investments made under this Act, the Fund may without restriction or delay in a freely convertible currency transfer the following funds into and out of Zimbabwe—
(a) contributions to capital, such as principal and additional funds to maintain, develop or increase its investment; and
(b) proceeds, profits from the assets, dividends, royalties, patent fees, licence fees, technical assistance and management fees, shares and other current income resulting from any investment of the Fund under this Act; and
(c) proceeds from the sale or liquidation of the whole or part of an investment or property owned by the Fund; and
(d) payments made under a contract entered into by the Fund, including payments made pursuant to a loan agreement; and
(e) earnings and other remuneration of foreign personnel legally employed in Zimbabwe by the Fund or in connection with an investment of the Fund.
(2) Any transfer of funds shall be allowed only after paying all tax obligations imposed on the amount to be transferred in accordance with the stipulated tax laws.
(3) Notwithstanding subsections (1) and (2), in the event of serious balance of payments or external financial difficulties, the Reserve Bank of Zimbabwe may temporarily restrict payments or transfers related to the Fund, provided that such restrictions are imposed on a non-discriminatory and good faith basis.

Under Fourth Schedule:

Schedule— Fourth Schedule (Section 14 (4)) Vesting of Shares of Certain Companies in Mutapa Investment Fund:
Defold Mine (Private) Limited Registration Number 6030/2015
Zimbabwe United Passenger Company Limited Registration Number 504/1980
Kuvimba Mining House (Private) Limited Registration Number 13291/2020
Silo Investments (Private) Limited Registration Number 3460/1992
National Oil Company of Zimbabwe (Private) Limited Registration Number 531/1983
Cold Storage Commission Limited Registration Number 716/1995
Petrotrade (Private) Limited Registration Number 5608/2010
Posb – People’s Own Savings Bank
Netone Cellular (Private) Limited Registration Number 2225/2000
National Railways Holding Zimbabwe Registration Number 10057/1998
Tel-One Private Limited Registration Number 4658/2000
Arda Seeds (Private) Limited Registration Number 21896/2007
Zimbabwe Power Company (Private) Limited Registration Number 6951/1996
Powertel Communications (Private) Limited Registration Number 5818/1999
Allied Timbers (Private) Limited Registration Number 3964/2000
Telecel Zimbabwe (Private) Limited Registration Number 360/1995
Air Zimbabwe Private Limited Registration Number 10852/1997
Industrial Development Corporation of Zimbabwe
Cottco Holdings Limited Registration Number 20924/2008
AFC Limited Registration Number 3339/2021
Hwange Colliery Company Limited Registration Number 381/1954
National Railways of Zimbabwe (Private) Limited Registration Number 10057/1998

Under section 20:

“3 Application of Act
(1) Subject to subsection (2) and (3), this Act shall apply to public entities notwithstanding anything to the contrary in their enabling instruments.
(2) This Act shall not apply to Ministries and departments of the Government.
(3) This Act shall not apply to any public entity registered as a banking institution under the Banking Act [Chapter 24:20], or to any public entity prescribed by the Minister by notice in the Gazette;

Provided that any entity so prescribed shall still be obliged to comply with the National Code of Corporate Governance of Zimbabwe set forth in the First Schedule.”.