Publications
Partners
Johannesburg - South African mobile network MTN [JSE:MTN] has apologised to shareholders of a black economic empowerment vehicle over the “frustration” in getting paid back in cash.
MTN moved to unwind its BEE scheme MTN Zakhele in November last year as it prepared to open up its new empowerment vehicle Zakhele Futhi.
READ: MTN unveils new R10bn BEE schemes
Zakhele Futhi took the form of a public offering where qualifying black participants were invited to subscribe for and beneficially own ordinary shares in the scheme with a minimum investment amount of R2 000.
Shareholders were also given the opportunity to re-invest a portion of their MTN Zakhele shares in MTN Zakhele Futhi or MTN Group shares, or to elect to receive cash.
However, reports emerged this week that MTN was not able to make all cash payments in December last year, resulting in frustration among some shareholders.
“We are aware of the frustration of MTN Zakhele shareholders who need to verify their accounts and receive the cash amount due to them and we apologise for any inconvenience experienced during the process,” said MTN in a statement on Tuesday.
“We can assure you that we are doing our utmost to ensure that this process goes smoothly and that shareholders are paid quickly,” MTN said.
READ: MTN launches new R10bn BEE scheme
The company further said it launched a communications campaign prior to the unwinding of MTN Zakhele requesting that Zakhele shareholders update and verify their banking details.
MTN said most of the Zakhele shareholders were paid around December 13 2016.
The company has further blamed unverified bank accounts for causing a disruptions to the process.
“To date, 84% of the total amount due to be paid out to MTN Zakhele ordinary shareholders who elected to receive cash for their shares during the MTN Zakhele unwinding process in 2016 has been successfully paid,” said MTN.
“Prior to making the payment to shareholders, a bank account verification process was undertaken and only those shareholders whose bank accounts failed verification - about 24 000 shareholders - were not paid.
“The necessary decision to verify banking details was made entirely for the protection of shareholders who may have closed or changed their bank accounts during the 6 year life of the scheme. In certain cases, bank account numbers of previously closed accounts may have been assigned to other banking clients,” said MTN.
However, MTN said all shareholders who did not receive their payments on December 13 are being paid with interest.
Shareholders whose accounts failed verification have also been required to provide FICA documents to update their bank details, including providing a stamped bank letter or a certified bank statement less than three months old.
MTN said this is to ensure that payments are processed into valid and verified bank accounts belonging to shareholders and to avoid fraud or incorrect payments.
Read Fin24's top stories trending on Twitter:
