MAIL & GUARDIAN / 16 OCTOBER 2019 - 00.00 / SARAH SMIT
A group of 382 MTN employees are taking the mobile telecommunications giant to court over payouts from a multibillion-rand black economic empowerment (BEE) share scheme.
The case — relating to the allocation of dividends derived from the unbundling of the scheme, worth more than R4-billion — will likely be heard in the high court in Johannesburg towards the end of the year.
In late 2002, company Newshelf 664 purchased 309-million shares in MTN at R13.89 a share, or R4.3-billion in total. The Alpine Trust — headed by five MTN executives, including former board chair Phuthuma Nhleko — held Newshelf’s shares on behalf of the scheme’s 3 260 beneficiaries.
The Alpine Trust aimed to allocate 75% of the benefits to black MTN employees. But beneficiaries of the scheme have claimed that the trust had reduced the amount originally allocated to them without explaining its process.
A 2003 letter to Lucy Mackay, one of the scheme’s beneficiaries, sets her provisional allocation from the scheme at 34 799 shares. But court papers show that, when the shares were distributed to beneficiaries in 2008, Mackay received only a fraction of that — getting 6 336 shares.
The 382 current and former employees in the court case claim that the allocation of their shares remains incomplete and suspect.
This is not the first time MTN has come under fire for one of its BEE share schemes. In July, the Broad-Based Black Economic Empowerment Commission found that the company’s Zakhele-Futhi Scheme “contains elements of fronting” because its black directors and shareholders did not have decision-making or voting rights.
The applicants in the matter are asking the court to order the appointment of a curator to manage the Alpine Trust to effect the payment of the outstandi