Mara Phones SA Projects (MPSA Projects), the company used to complete the management buyout (MBO) of embattled smartphone manufacturer Mara Phones SA, is set to retrench employees.
This, after saying in the middle of last year that it will move swiftly to restart operations and retrain staff.
In a statement, MPSA Projects says it has informed its employees and other stakeholders of its plans to implement Section 189 of the Labour Relations Act.
The company has a staff complement of 68 employees, but indicates the number of affected employees is not clear at this stage.
It adds that consultations with employees and their representatives will commence on Friday, 3 February.
Says Ntokozo Mahlangu, director of MPSA Projects: “Sadly, the company is forced to take this difficult but necessary restructuring process if we are to ensure its long-term sustainability. This process will, no doubt, affect people's livelihoods and have a knock-on effect on their families. This is sincerely regrettable.
“Having exhausted all other options, we are now faced with the difficult task of having to restructure the business in order to remain agile to future opportunities.”
Mara Phones SA was considered a symbol of “true” African smartphone manufacturing and a labour market boost when it opened its facility at the Dube Trade Port Special Economic Zone in KwaZulu-Natal in 2019.
In February 2022, it was reported that the manufacturing plant was “empty and on auction”, with the sale mandated by Standard Bank and the Industrial Development Corporation – financiers of the smartphone facility.
Following this, it was taken out of business rescue last July, following a strategic partnership between an MBO team, co-led by Mara Phones SA former MD Sylvester Taku, Mabuti Radebe and Lebashe Investment Group, a 100% black-owned unlisted investment holding company.
However, since then, the company has failed to commence operations for a number of reasons, according to the statement.
It lists disputes between the minority shareholders, misconduct and the inability to secure banking facilities among the reasons operations haven’t commenced.
“After carefully considering the above, it became clear that the company has no other viable alternative,” the statement reads. “It has not been able to recommence operations and there has been no work for the employees since emerging from the business rescue in July 2022.”
It goes on to say that in the interest of fairness, transparency and good governance, it intends to conduct “meaningful and consensus-seeking” consultations with multiple stakeholders, including the employees and their representatives.
“During these consultations, the company will attempt to reach consensus on the proposed method of selecting potentially affected employees, the number of employees likely to be affected and the job categories.
“Based on the outcome of the consensus-seeking process, affected employees will be individually identified and informed accordingly.”
Mahlangu adds: “Notwithstanding this, the employees that will be retrenched shall be given first preference for re-employment should the operations of the company recommence.”
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