What is the impact of local legislation on the adoption of share schemes for investment in foreign equity? Particular reference to the BP group share scheme in Zambia
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Share allotment to would be subscribers, or in short shareholders, is one of the major sources of capital for most companies limited by shares as well as companies limited by guarantee. It is, however, not just a one sided gain as it also benefits the shareholders themselves since it is a source of empowerment in terms of acquisition of rights due to a subscriber, which include, inter alia, participation in the distribution of capital, voting right and dividends. This is the position that an employee who subscribes to a share option scheme, a scheme whereby the employer gives the employee the right to subscribe to the companies shares, acquires. However, the share option scheme, though seemingly a good development as far as empowerment of Zambian employees are concerned, it is a source of concern because some of the companies that have been listed on the stock market (Lusaka Stock Exchange) by adopting share option schemes for their employees, are largely multinational corporations that may sometimes not even be subject to the laws of the land as they were incorporated elsewhere other than in Zambia. Therefore, the impact of local laws on the operation of share schemes that these large companies have adopted becomes a complicated one. This is more especially so when some of the beneficiaries those that are intended in these share schemes are Zambian employees. Hence the urgent need to undertake a substantial study concerning the impact of local legislation on the adoption of the share schemes that are designed by the foreign investors in Zambia through savings of employees for investment in their foreign equity or capital. Particular reference shall be made to the operation of the BP Group Share Scheme in Zambia.
- Law