MTN Zakhele under fire

WANT THEIR MONEY Despite promising to clear all shareholder payments by December last year and then by February, MTN Zakhele is still holding investors’ cash. FRUSTRATED CLIENTS

MTN Zakhele, the black economic empowerment (BEE) share scheme of telecommunications giant MTN Group, is still processing payments to shareholders who opted to cash in their shares after the scheme expired in November last year.

It has been nearly seven months since the expiry and several shareholders are yet to receive their payouts. This despite a Zakhele circular which noted that the majority of shareholders would be paid by December 13. When Moneyweb first reported about the delays in payouts to shareholders in January, MTN said 80% of shareholders had been paid and outstanding payments would be made before the end of February 2017.

Zakhele, which owned a 4% stake in MTN Group, was launched in 2010 as part of the company’s empowerment initiative.

About 124 000 Zakhele investors were given three options when the scheme expired: accept a combination of converting a portion of their Zakhele shares into MTN Group shares and take cash; reinvest their shares into a newly launched BEE scheme called MTN Zakhele Futhi; or wholly take cash for their shares.

However, some shareholders have still not received their payouts despite repeated calls to Zakhele’s call centre.

“I have not received my MTN shares and proceeds after converting from MTN Zakhele to the listed MTN,” said one shareholder, who opted to convert a portion of his Zakhele shares into MTN Group shares and take cash. Others voiced similar concerns to Business.

Sydney Mhlarhi, director of investment holding firm Tamela, who is advisor to Zakhele, said about 87% of shareholders have been paid and the main backlog cleared.

“There was quite a bit of backlog in unprocessed payments after the Christmas break. That backlog has now been cleared. But there is definitely still money due to some shareholders,” he said.

Mhlarhi said the reason for delays were two-fold. Some shareholders have changed their contact details, resulting in difficulties in contacting them about their unclaimed proceeds, or shareholders didn’t verify their bank accounts.

Shareholders whose accounts failed the verification process must provide documents to update their bank details, including a stamped bank letter or a certified bank statement that is less than three months old.

Mhlarhi said an initiative to contact shareholders had been launched.

The nature of other complaints received from shareholders include enquiries about proceeds for a deceased estate and who is entitled to the payout.

Clients complained about Zakhele’s poor communication channels. Mhlarhi said Zakhele’s centre was able to deal with complaints as there wasn’t a backlog of unpaid proceeds.

“The volume of enquiries has dropped. In January, we were processing up to 400 payments per day but now we roughly processing 50 to 100 payments a day,” he said.