Zimbabwe's government has effectively expropriated the country's largest public company, Kingdom Meikles Africa Ltd, under a much criticised so-called anti-corruption law.
The move is likely to further discourage investment in Zimbabwe which is struggling to attract foreign capital.
Kingdom Meikles was "specified" last Friday in the Government Gazette under the "Prevention of Corruption Act"
This means the company, also listed in London, and all its subsidiaries cannot make any transactions without the approval of an investigator appointed by the government to examine allegations of corruption.
The group represents hundreds of indigenous investors and employs thousands of Zimbabweans.
The specification law was established by President Robert Mugabe's Zanu-PF administration, but the action against the Kingdom Meikles group was, surprisingly, endorsed by the Movement for Democratic Change's co-minister of home affairs, Giles Mutsekwa.
The "specification" order in the Government Gazette was signed by the two ministers, Zanu-PF's Kembo Mohadi and Mutsekwa.
The former chairman of Kingdom Meikles Africa group, John Moxon and his family, who are major shareholders, had to flee Zimbabwe last year when he was individually "specified".
And now the group and its subsidiaries are under threat.
The merged company represented two eras and diverse interests.
Meikles, for generations, broke new ground, establishing the largest retail group, tea estates, tourism and more.
It gave its name to the country's most famous hotel, Meikles, in central Harare.
Kingdom, a post-independence black-led banking group, was hugely successful before Zimbabwe's economic meltdown.
The two companies merged two years ago and the new chief executive officer, Nigel Chanakira, was installed with great expectations.
Within months, there were signs of trouble.
On September 24, an emergency meeting of shareholders will be asked to confirm Chanakira's removal in accordance with terms approved in June by shareholders who agreed on the demerger of the two groups
The "anti corruption" law, described as "fascist" by a leading Zimbabwean lawyer who asked not to be named yesterday, allows no recourse to the courts.
An interpretation of the action against Kingdom Meikles is that it could serve to be a "warning to potential investors that they could face effective arbitrary expropriation of assets, and human rights violations" under the inclusive government, according to one major shareholder.
This article was originally published on page 14 of Cape Argus on September 16, 2009