Econet Media was put into administration a few months ago after the company hedged its bets on the wrong horse (figuratively, of course) which left the company staring a US$130 million debt in the face.
A tip from a former worker alleges that the Media company’s problems don’t end there as they are allegedly yet to fully pay the 700+ workers who were supposed to get their retrenchment payments by the 15th of December:
Since the closure of Kwese Channels and the liquidation of Econet Media, Over 700 staff members have been retrenched. Strive Masiyiwa had promised that staff would receive their retrenchment payments in 3 parts, end of august, end of october and the final payment of the full outstanding amount was to be paid on the 15th of december, to date they have paid less than 30% of the money outstanding to staff. All we get are excuses and lies. Since kwese has closed, Econet Wireless group has undertaken to fulfill obligations to staff but that has not been forthcoming. The lack of communication from the group has been the worst part, emails regarding payment are sent out on the day monies were meant to be paid. giving us reasons why the not. In November we were told all monies will be paid by the first quarter of 2020, last week we were told that they endeavour to pay our monies by the first half of 2020.
The tipster also shared emails they allege to be from Econet Media regarding these payments:
If the last email sent to former staff is to be believed the sale of assets has only amounted to $2.6 million (2%) of the amount owed.
The Econet Group repeatedly mentions to the retrenched Kwese employees that their operations in some regions are affecting cash flow. This is probably mostly Zimbabwe which continues to be the group’s most important market. However, Zimbabwe’s economic and currency situation is confusing at best and disastrous for a multinational company at worst.
An important little bit to note is that Econet is referring to the whole Kwese/Econet Media fiasco as a failure. That humility is important if they are not to repeat the same mistake again.
We reached out to Econet regarding the payouts issue and they clarified that they’ve actually had to source funds from within the group instead of waiting for the sale of assets to fund retrenchment packages:
Econet Media Limited went into voluntary administration in July 2019. Its South African subsidiary Kwese Channels Pty Limited, through which a majority of staff were employed is under voluntary liquidation.
Whilst the process of administration and liquidation would have ordinarily meant that the former staff of Econet Media would have had to wait for the process to be finalised before receiving any final dues, the Econet Group has so far made cumulative payments amounting to 36-50% of the total retrenchment packages offered to staff. These payments are in all cases already higher than those staff would have received from the liquidation process and have been made from other sources within the Econet Group.
Given the complexities of the administration process involving multiple jurisdictions and hundreds of trade creditors, inevitable delays have been experienced in payments to staff. However, the Econet Group is committed to meeting its obligations to all the staff formerly employed under Econet Media Limited.
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