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  • Blow to MTN staffers accusing execs of swindling them of millions

Blow to MTN staffers accusing execs of swindling them of millions

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The High Court has removed the case in which former and current MTN staff members were accusing the company’s senior executives of swindling millions of empowerment shares.

In November last year, ITWeb reported that about 400 MTN employees had filed an application for condonation at the High Court, pleading to have the matter heard in an open court.

The staffers were demanding over 200 million shares allocated to them over a decade ago in an employee share ownership scheme, saying their portion of shares was misappropriated in a trust.

The trust, Alpine, was set up by MTN as an investment vehicle for the employees.

The employees, who go by the moniker Tsunami Group, claimed that in late 2002, company Newshelf 664 purchased 309 million shares in MTN at R13.89 a share, and the agreement was an employee would have to work for six consecutive years to receive 100% participation ratio.

In addition, they claimed after settling the debt, there were over 200 million shares that were never distributed. The employees said the estimated value of the shares was pegged at R35 billion.

However, MTN challenged the Tsunami Group at the courts.

In its ruling on 29 March, the court says the applicants launched a poorly pleaded case and then sought to patch it up in a replying affidavit that was filed extraordinarily long out of time, without offering a detailed explanation for the delays, and “ultimately satisfying themselves with a submission that the court must take a robust approach in the interests of justice despite the many shortcomings of its explanation”.

It adds that the case for condonation was not properly motivated, and the need for the case to be formulated comprehensively is evident from a consideration of the full set of papers filed of record.

“In addition, since the applicants themselves foreshadow a referral to oral evidence, the interests of justice suggest that the referral to arbitration would in any event not unduly delay the matter. In fact, in view of the case load of this court, resolution of the disputes may well be achieved more expeditiously through a properly managed arbitration process.”

Said acting judge M Engelbrecht: “Despite my criticism of the conduct of the applicants, I am not minded to make an adverse costs order.

“The applicants are not people of great means, and this court takes the view that it would be inappropriate to make an adverse costs order against individuals who genuinely seek to assert their rights. The interests of justice dictate that the applicants’ claims should now be taken to the right forum and adjudicated upon there. To burden the applicants with a costs order would not be conducive to the resolution of the matter.”

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