Workers fail to pay Meikles' 10pc stake

HARARE -  Employers of Meikles Limited are struggling to raise funds to purchase 10 percent of the group’s shares through an employee share ownership trust.

The employees yesterday told the thematic committee on Indigenisation and Empowerment that when Meikles launched its employee share ownership trust (ESOP) in 2011, it intended to mobilise resources on workers’ behalf to purchase 24 million shares, which account for 10 percent of the group’s shares.

They said the company had realised that because of the low salaries they paid them, they could not afford the shares, so they offered to pay for them.

The employees were in turn supposed to pay back the company when they got dividends.
Meikles workers said they were shocked to learn the company had purchased one third of the shares using funds from their Old Mutual pension fund without their consent.

Rodney Mutinhiri, chairperson of Meikles workers’ committee, said they had lost hope of benefitting from the scheme as the Deed of Trust outlines that employees will start to enjoy the fruits only after they purchase all the 24 million shares in full.

“The situation prevailing is such that we do not hope to benefit from the scheme because according to the deed of trust, we can only be issued with a share ownership certificate after we buy all the shares in full,” Mutinhiri said.

“Our pension funds have been used and there is a hole in that area yet the investment we made into the scheme is not enough to make us benefit. All we have is a promise,” said Mutinhiri, adding that the company had not declared dividends since 2011.

Courage Shumba, another workers’ representative, said while the company has purchased 1,6 million shares using the employees’ pension fund which is accumulating interest, there was nothing for them.

Mutinhiri also complained that only management was represented in the trust — drafted by the Indigenisation ministry without workers’ input.

He said government had never followed up on the scheme since it was launched and urged Parliament to intervene to make sure the company genuinely complies.

Mutinhiri said when workers raised the issue with management; they were told that the decision had been hastily taken in a bid to comply with the country’s laws.

“As workers’ leaders, we represent labour yet in the trust we are represented by people who fight for the interests of capital,” Mutinhiri said. “We are not involved in the decision-making process and taking our pensions is one unfavourable decision they have since taken on our behalf.”

The employees claimed they were told by Meikles proprietor John Moxon, that the firm would assist them purchase all the remaining shares if his funds held by the Reserve Bank of Zimbabwe were repaid.

The central bank reportedly owes Meikles $76,5 million dating back to 1998, accrued from transactions relating to the group’s dual listing on the Zimbabwe Stock Exchange and London Stock Exchange.

The committee, chaired by Cleveria Chizema, wanted to know the criteria used to select trustees of the ESOP.

Ishmael Mukarabwe, another Meikles employee, told the committee that some employees who were retrenched went home empty handed with only plates that the company was discarding.
Mukarabwe said another employee was given $6 000 after serving for 30 years, pointing to the possibility that his pension had been affected by the contribution he made for the shares.

He said they were worried that they were going to incur a double loss in that while their pension has been affected, the investment they made into the shares was not materialising.

“The company invited the retrenched employees and their families to spend two nights at the hotel and were later given six dinner plates each and coffee mugs,” said Simon Madzivire of Tanganda Tea company, a subsidiary of Meikles.

Comments (1)

Be careful, indigenisation or empowerment without the means will lead to poverty hunger and death. Some of your policies are wild and barbaric

herber - 18 July 2014

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