Harere, Zimbabwe (CNN) -- The Zimbabwe government will probe about 700 foreign-owned companies that have missed a deadline to tell the government how they will transfer their majority equity to indigenous people, risking "serious consequences," that include cancellation or suspension of their operating licenses, a government body official said Tuesday.
The deadline fell on Sunday but was moved to the following working day.
Under the controversial economic empowerment law that came into force last year, foreign-owned firms must give at least 51% equity to black Zimbabweans. Those that fail to comply face legal action, which can be withdrawal of their operating licenses.
The law was passed in 2007, before President Robert Mugabe's Zanu PF party lost its majority in Parliament the following year.
Prime Minister Morgan Tsvangirai has said the law scares away investors, while Mugabe maintains the law is meant to correct colonial imbalances.
Wilson Gwatiringa, chief executive of the National Indigenisation and Economic Empowerment Board -- a government body set up to advise on the implementation of the law -- told journalists that his organization together with the police would "soon" probe the defaulting foreign-owned companies.
"The board is aware that many non-indigenous companies have not complied with the indigenisation law as they are reluctant to submit their plans for approval," said Gwatiringa. "Some of the serious consequences of non-compliance include cancellation or suspension of operating licenses as well as payment of hefty fines."