Meikles workers to control trust

Meikles workers to control trust
Published: 21 July 2014
MEIKLES workers say they are being sidelined in the Employee Share Ownership Trust but the company says the workers will this year take over the scheme following the lapse of the two-year period for the trustees appointed by the group.

ESOTs were established to give employees an opportunity to participate directly in the development and growth of the companies in a way that will generate individual as well as collective value.

The workers' representatives, who petitioned the Portfolio Committee on Indigenisation and Empowerment yesterday, said the company appointed the first trustees to the ESOT and excluded the workers and this has caused consternation among them.

They said that the ESOT Deed of Trust was crafted by the company and had no representative from the non-managerial members of staff. The workers alleged that they were not aware how many shares each member is entitled to.

Some of the decisions the workers are not happy with include the $1,4 million loan from Meikles Pension Fund for the purchase of 8 418 510 shares.

The workers representatives told the portfolio committee that while loan is accruing interest, the workers are yet to be given share certificates.

"We might be forced to wait for even up to 50 years to enjoy the benefits of the share ownership scheme because the way the Deed of Trust was crafted offers no benefit to the workers," said Mr Rodney Mutinhiri, chairman of the Meikles Hotel workers committee.

But Meikles executive director Mr Mark Wood said the trustees appointed by the company at the setting up of the trust are set to resign this year.

"The workers will appoint 60 percent of the trustees to the Employee Share Ownership Trust following the lapse of the two-year tenure of the company appointed trustees," said Mr Wood.

"One of the workers representatives sit on the group's main board," he said.

He said the company reserved the right to appoint the first directors to the ESOT for two years.

On the loan, Mr Wood said two other options were pursued before settling for the loan. He said the workers rejected a proposal to have deductions on their monthly wages towards the purchase of the shares saying they could not afford it.

The second option was for the trust to approach financial institutions to source for funding to finance the purchase of the 24 million shares representing 10 percent of the company's issues share capital.

"The trust approached banks but none of them were prepared to finance the scheme. The Trust then explored the third option which was to approach the Meikles Pension Fund for finance.

"The pension fund released the $1,4 million for the 8 418 510 shares which is about one third of the 10 percent the workers are entitled to under the scheme," said Mr Wood.

He said when the pension fund could not finance the purchase of the 24 million shares, Meikles offered to assist the workers only after it receives what it is owed by the Government.

On the allocation of shares to individual workers, Mr Wood said the workers will receive share certificates only upon payment for the shares in full.
- The Herald
Tags: Meikles,

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