ITWEB / 30 OCTOBER 2019 - 11.02 / SAMUEL MUNGADZE
Pan-African telecoms group MTN has launched a stinging attack on a group of employees that are demanding answers on a R4.3 billion black economic empowerment (BEE) deal.
The staff members had gone on an offensive, accusing senior executives at the mobile operator of swindling millions of shares that were allocated to staff in an empowerment transaction.
Current and former MTN staffers claim over 200 million shares allocated to them in an employee share ownership scheme were misappropriated in a trust.
The trust, Alpine, was set up by MTN as an investment vehicle for the employees in 2003.
The employees allege the trust sold 243 million MTN shares held by its subsidiary, Newshelf, back to MTN in May 2009, in a three-way transaction involving the Public Investment Corporation.
Further, they claim, the trust has failed to properly account to the employees by demonstrating why the proceeds of the sale of those shares were not distributed to the beneficiaries, and what became of those proceeds of sale.
The decade-long squabble will now head to court as the employees, calling themselves Tsunami Group, are questioning the allocation of dividends derived from the unbundling of the scheme, worth more than R4 billion.
The Alpine Trust – which was headed by five MTN executives, including MTN Group chairman Phuthuma Nhleko and former CEO Sifiso Dabengwa – 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 Tsunami claims the trust reduced the amount originally allocated to them without explaining its process.
It says the capital distribution to them remains incomplete and suspect.
Now, the Alpine Trust has hit back.
“There are no missing MTN shares; the beneficiaries have not been short-changed; there is no further undisclosed source of MTN shares or money due to the beneficiaries; and, as such, this entire application is misdirected,” reads the affidavit filed last week by trust chairman Paul Jenkins.
He continues: “In this application, having failed to put a coherent case in the founding affidavit whatsoever, the applicants change tack in reply by now suggesting that because there has been no explanation of the allegedly missing MTN shares, there has not been full accounting, and in turn, a full accounting is required to establish what happened to the ‘missing’ 200 million MTN shares.”
Jenkins adds: “In a final attempt to rescue their case, the applicants also suggest, as an alternative, that the matter should be referred to trial, given the dispute of fact and the allegedly missing MTN shares.”
However, the Tsunami Group insists that over the course of “several years”, and “many queries”, the employees have, to date, been denied a full accounting by MTN.
The employees insist they have no choice but to vindicate their common law rights as capital beneficiaries and hope for an order that the respondents (MTN) render to them a full and proper account of the true capital, investments, income and expenditure of the trust; or interdictory relief to secure their rights pending an action for statement and debatement.
“It’s been a journey of about three years since we decided to pursue this matter legally. A group of current and ex-MTN employees decided to group themselves and start a class-action against MTN, Newshelf 664, the Alpine Trust and its directors. It’s been over 10 years since this exploitation of employees and breach of BEE rules by MTN and its trusted partners,” the employees say.
Responding to accusations directed at senior MTN executives, who are also trustees to the Alpine Trust, Jenkins says: “It is deeply upsetting that the applicants consider they are entitled to impugn the integrity of the respondents some 10 years after accepting the benefits of their participation in the trust and long after any claims have been prescribed without putting up a single fact to justify their allegations and aspersions.”
The Tsunami Group insists this is “not complex as they make it out to be as we have the right to this information as beneficiaries of the Alpine Trust. It is clear why they would not want us to have a view of the financials as it would expose them, to say the least.”
Further, the group alleges MTN is playing delaying tactics with the hope that the complainants run out of funds and interest.
“Well, we are not going to run out of any of these, we have prepared for such, and we have seen it so often in South African courts.”
LINK : https://www.itweb.co.za/content/xnklOvzb4zgv4Ymz/oJKjlyr7wO7k6amV
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER