MTN employees head to court over R4.3-billion BEE scheme
MYBROADBAND / 17 OCTOBER 2019 - 11.36 / BRADLEY PRIOR
MTN employees are taking the Alpine Trust to court over allegations of insufficient BEE payouts, according to a report by the Mail and Guardian.
Newshelf 664 (which is owned by the Alpine Trust) bought 309 million MTN shares in 2002, totalling R4.3 billion in value, with the intention of allocating three quarters of the share benefits to black MTN employees.
However, current and former employees allege that they have not received the full payout originally promised by The Alpine Trust, which is headed by five MTN executives and tasked with the management of these shares.
One employee said that while they were originally promised 34,799 shares, she only received 6,336 shares when they were distributed in 2008.
Chris Jenkins, the chairman of The Alpine Trust, said in 2008 that after paying back funders and selling off some of the shares, the trust only held 34.4 million MTN shares which were now worth R3.4 billion due to a substantial rise in MTN’s stock price.
Jenkins also said that while The Alpine Trust would distribute most of these stocks, it would retain 300,000 shares to deal with its costs.
“At some time in the future you should receive a small final distribution from the trust out of what is left of the 300,000 shares that we have held back,” said Jenkins.
However, in 2013, Jenkins said that such a final distribution was unlikely to occur.
The Tsunami Group
The Tsunami Group, which was formed to represent the beneficiaries, sent a letter to Jenkins in 2017 that asked for clarification regarding the final distribution that the beneficiaries were owed.
Jenkins responded that The Alpine Trust held 160,000 MTN shares that were worth about R20 million.
One beneficiary accused the trust of poor conduct, claiming that what they had done fell “well short of what is required of them by law”.
The beneficiary added that the vast disparity between the trust’s assets and the value of the distribution was irregular – particularly considering the increase in MTN share values between 2002 and 2008.
“All the trustees have no doubt financially benefited handsomely from the unwinding of the trust and Newshelf, yet the applicants and I, as beneficiaries, have no satisfactory answers or clarity to the distribution of our dividends and share allocations,” said the beneficiary.
Jenkins disputed these accusations, claiming that the trust did not have “a hidden or secret reserve of shares in MTN” that should be distributed to beneficiaries.
“There are simply no additional MTN shares for distribution,” said Jenkins.
Jenkins said that the beneficiaries had already received R200 million from the trust.
“Despite this considerable benefit having already been received, these applicants do not accept that inevitable fact that there is no further pot of gold at the end of the rainbow,” said Jenkins.
MTN Group told MyBroadband that no relief has been sought against MTN specifically.
“The claim is against the Alpine Trust and its trustees in respect to its shareholding in MTN,” said the company.
“The matter is before the courts for determination.”
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER