Delayed payment MTN Zakhele shareholders to get interest
26 January 2017
MTN is aware of the frustration of MTN Zakhele shareholders who need to verify their accounts and receive the amount due to them, the company says.
MTN has reassured MTN Zakhele shareholders who have not yet received payments that they will be paid with interest by the end of February.
MTN Zakhele, the company's empowerment scheme, was established in 2010 and listed on the Johannesburg Stock Exchange's (JSE's) black economic empowerment segment.
In December last year, MTN announced it was de-listing MTN Zakhele from the JSE, as it completed its planned unwinding process for the empowerment scheme, which reached maturity in November.
In August, MTN announced its new broad-based black economic empowerment scheme, MTN Zakhele Futhi, would take over from MTN Zakhele.
At the end of last year, MTN said it had raised R2.32 billion via an accelerated bookbuild, by placing over 21 million shares at a price of R110.50 per share. The cash was needed to settle the cash consideration component of the Zakhele scheme as it unwound.
Shareholders were to each receive close to R59.08 per share for their Zakhele shares – which originally started trading at R20 per share in 2010.
Yesterday, media reports said after two months since MTN Zakhele expired, some shareholders were still to receive the proceeds from their shares.
Sydney Mhlarhi, director of Tamela, advisor to MTN Zakhele, says a communications campaign was launched in advance of the unwind of MTN Zakhele requesting that MTN Zakhele shareholders update and verify their banking details, which the majority of shareholders did.
He points out that most MTN Zakhele shareholders were successfully paid on or about 13 December 2016, as planned and communicated in the MTN Zakhele circular.
"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," says Mhlarhi.
He notes that 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.
According to Mhlarhi, payments will continue to be made as and when the necessary change of details forms are processed and the bulk of these payments will be made before the end of February 2017.
All shareholders who did not receive their payments on 13 December are being paid with interest, he adds.
"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 six-year life of the scheme. In certain cases, bank account numbers of previously closed accounts may have been assigned to other banking clients."
He points out that shareholders whose accounts failed verification were required to provide Financial Intelligence Centre Act documents to update their bank details, including providing a stamped bank letter or a certified bank statement less than three months old, in order to be sure payments are processed into valid and verified bank accounts belonging to shareholders and to avoid any instance of fraud or incorrect payments.
Mhlarhi adds that following the initial pay-out, additional communication was sent to shareholders whose bank accounts had failed the initial verification to update and verify their details so they could receive the funds due to them.
A high number of change of details forms were subsequently received, which the MTN Zakhele service providers are working hard to verify and update records in order to ensure payments are processed as quickly as possible, he notes. The service providers have employed additional resources to process these change of details forms timeously and to ensure the remaining MTN Zakhele shareholders who elected to receive cash are paid as soon as possible.
"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.
"We can assure you that we are doing our utmost to ensure this process goes smoothly and that shareholders are paid quickly. We call on all shareholders who still need to provide the necessary documentation to do so as soon as possible."