Delta Beverages in Zimbabwe indigenisation hoax

Beverage maker, Delta Beverages is non compliant with the Indigenisation and Empowerment Act, parliament was told on Thursday.

Giving oral evidence to the Indigenisation and Empowerment Thematic Committee on the modalities of the Employee Share Ownership Scheme, Delta Corporation Limited Works Council (CLWC) chairperson John Shumba said there was no indigenisation plan at  the company.

"Indigenisation is not yet there at Delta Beverages though we have heard so much about compliance certificates and seen numerous ministers coming to celebrate."

CLWC secretary Chris Chatanda said that the existing Delta Beverages Employee Trust Fund (DBETF) was not the one where the company ceded money for employees benefit.

"The existing Trust Fund is not the one where the company ceded money for employees benefit.

"This is a fund that was created with employees' money that came from Old Mutual meant to pay workers that joined the organisation before July 1999," he said.

According to the Indigenisation and Empowerment Act introduced in 2008, at least 51% of the shares of every public company and any other business should be owned by indigenous people.

To comply with the Act, many companies have formed Trusts were they ceded between 5-10% of total equity for either community or employees benefit, and these have been generally been referred to as Trust Funds.

Chatanda said that each time workers seek audience with management to discuss issues of indigenisation, they are told the company submitted a plan to Paul Mangwana, indigenisation minister in 2007.

Shumba said on July 1, 1999, Old Mutual demutualised workers pension scheme and paid out Z$21 000 to each of the more than 3 000 employee who had been serving the company before then.

"The money was given to the responsible beneficiaries, but taken by the company to form the DBETF in 2001," Shumba said.

He said DBETF was run by directors who were chosen by employees and management and the term of office was supposed to be five years on a rotational basis.

"However, management only constitute directorship of the fund leaving workers and their representative out of the Fund.

"That is when we started to question the so called demutualisation from the monies which was supposed to come from Old Mutual to be given to employees."

Besides that, Shumba said there is a retention scheme which was run by the company in 2008 which also ran the risk of being misconstrued as an  indigenisation scheme.

"We have a situation whereby in 2008 the country experienced an acute skills flight, and the company had to find a way of retaining their workforce.

"The company offered that any employee who were going to be present in the next five years starting from September 1, 2008 would be given 5 000 shares at current  market," he added.

Shumba said that the retention shares were then misrepresented by the company as indigenisation shares.

"We want the company to give workers their money that came from Old Mutual and not to misrepresent the retention shares.

"Yes, the money was Z$21 000 but we want the company to pay each of the employee US$21 000." he added.

There are at least 2 450 employees currently working for Delta who were paid by Old Mutual in 1999.

Shumba said the Fund has at least $120m which could cushion the company from a loss should it pay the employees what is due to them.