MTN’s Zakhele Futhi leaves traders disenchanted with low returns

MTN’s Zakhele Futhi (MTNZF), a Black Financial Empowerment (BEE) funding scheme, will start paying out shareholders from July 28, 2025, almost 9 years after it launched. However for a lot of of its traders, the long-awaited payout gives little comfort, as they are saying the modest returns fall far wanting the worth they have been promised after they have been first locked in.

“I shall be fortunate to get again what I put in,” says Nomvula Buthelezi, a Human Sources Practitioner. “They prolonged the funding time period to 2027, however they now state that there is no such thing as a profit in continuing resulting from market volatility. For my part, they made their earnings, and the scheme didn’t profit me as an investor.”

The cracks within the scheme’s basis have been seen lengthy earlier than its closure. In 2019, the B-BBEE Fee flagged MTNZF for being inconsistent with the targets of the B-BBEE Act, which means it was not genuinely empowering black shareholders as meant. The Fee famous a number of restrictions and limitations positioned on Black shareholders; as a substitute of giving them actual possession and decision-making energy, the scheme positioned limits that went in opposition to what the Codes of Good Follow require.

Whereas MTNZF  expressed its willingness to cooperate with the Fee, traders confirmed their frustration and disappointment as the cash they’re getting now could be far lower than they anticipated from one in all South Africa’s largest telecom firms.

“I invested R20,000 (R20 a share) in 2016, for many people, it was the primary time we had performed one thing like shopping for shares as black ladies incomes middle-income salaries,” stated one other investor, who requested to stay nameless. “Laborious-earned financial savings, however now, virtually 9 years of lock-in, with little to point out.”

Luvo Gray, the secretary common of Progressive Blacks in ICT (PBICT),  an advocacy group, instructed TechCabal that MTNZF might have delivered modest capital returns, however for a lot of traders, the monetary final result fell wanting expectations. 

“The scheme’s empowerment objectives have been commendable, however the low liquidity, excessive volatility, and underperformance relative to the market increase essential questions on how we construction future B-BBEE funding automobiles. Possession should include actual, aggressive worth creation,” he stated.

MTNZF is just not an remoted case. Comparable BEE schemes by Vodacom, Telkom, and Cell C have struggled to ship on the expectations.  This case undermines the aim of B-BBEE, which is to drive inclusive financial transformation. As an alternative of transferring possession and management, it creates the phantasm of compliance whereas sustaining the established order.

Gray famous that to revive belief in equity-based empowerment schemes, there must be better transparency, exit optionality, and stronger alignment between the monetary upside and the dangers traders bear. 

“Broad-based possession is important, but it surely should even be genuinely rewarding if we’re to drive long-term participation within the fairness financial system,” he stated. 

What ought to shareholders who need to money out do?

For the shareholders who need to money out, MTNZF instructed TechCabal the returns shall be paid to shareholder financial institution accounts for certificated shareholders. For these shareholders who maintain shares electronically (additionally referred to as dematerialized), the payout will go to the Central Securities Depository Participant or a dealer who manages their accounts. 

The primary cost of R20.00 per share shall be made on 28 July 2025, with a second distribution of roughly R2.00-R3.00 per share anticipated thereafter.

To make sure that this occurs on time, shareholders are inspired to replace their checking account and make contact with data. This may be performed by means of the Shareholder Companies centre, which will be accessed by way of cellphone at 010 476 2012 or 083 900 6863, WhatsApp at 011 321 5400, or electronic mail at MTNZF@singular.co.za.

Can shareholders promote their MTNZF shares?

MTNZF is now only a money payout operation; it’s not working as an funding scheme. The one belongings left are a number of bizarre MTN shares and a few money that shall be paid out after prices and taxes. 

“Whereas MTNZF shares should still technically be traded, they mirror solely the remaining residual MTN bizarre shares to be bought and money to be distributed after paying or offering for prices and taxes,” MTNZF stated. “As such, shareholders are suggested to train warning when contemplating any sale, as the worth is now tied to the sale of the residual MTN bizarre shares and remaining money distributions.

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