Mugabe threatens to seize foreign firms

Zimbabwe will transfer ownership of all foreign-owned firms that support Western sanctions against President Robert Mugabe's government to locals and investors from "friendly" countries, a state newspaper reported today.

The southern African state is struggling with an economic crisis many blame on Mugabe's policies, which has left it with an inflation rate of over 2 200 000% and chronic shortages of food and other basic needs.

Mugabe's government blames the crisis on sabotage by enemies angry over his seizures of white-owned farms for blacks and has followed up that policy with another controversial law seeking to transfer majority ownership of foreign-owned firms to locals.

Mugabe, fighting to retain power after winning a run-off poll boycotted by his rival, says Zimbabwe's severe economic crisis is due to sabotage by former colonial master Britain, its European Union allies and the United States.

The Sunday Mail paper said preliminary results of Zimbabwe's audit of foreign investments showed that 499 companies enjoyed British investments. Of these, 309 had majority shareholders in Britain and 97 were wholly owned by Britons.

The audit also found 353 firms with shareholders from other European countries, the weekly said in a story largely attributed to unnamed government sources.

Although some British investors had so far rebuffed a call by London to pull out of Zimbabwe, Mugabe was taking no chances, the newspaper said.

Mugabe's spokesperson George Charamba confirmed the government's drive against Western firms adding that the government was not sleeping. - Reuters