Foskor’s R350m Esop scheme collapses

Details

FoskorCity Press reports that a BEE share ownership plan (Esop) at Foskor, which was valued at more than R350 million, has crashed, leaving the dreams of more than 1,800 employees in tatters.  

Details regarding the collapse of the Kopano Foskor Employee Share Ownership Plan (Esop) are sketchy, but it has been confirmed that employees did not receive their payouts when the scheme matured on 30 March last year.  The government holds a majority shareholding in the fertilizer and chemicals producer through the IDC, which holds a 59% stake.  In 2009, Foskor set up the Esop Trust to acquire a stake on behalf of its workers.  In 2010, Foskor, through the Esop Trust, borrowed R147 million from the Industrial Development Corporation (IDC) to buy a 6% stake for about 1,800 qualifying employees.  The agreement between the Trust and employees was that, when the shares matured in March last year, employees would become direct shareholders in the company if it were to list on the JSE.  If Foskor failed to list, management had promised that employees would receive cash payments equivalent to the value of their shares.  Foskor did not list on the JSE in March last year and those employees who were members of the scheme did not get cash payouts.  A memorandum circulated within Foskor two months ago reveals that the share scheme has collapsed.  About 40 members, some of them former employees of Foskor, are now preparing to drag the Kopano Trust and Foskor to court over the collapse of the scheme.  Adv. Thembinkosi Gumbi, who is representing the group, said:  “We are in the process of gathering information to prepare for trial.  We will sue both Foskor and the trust over the collapse of the scheme.  We want to know what happened.  For more than a year now, we have been requesting financial statements and minutes of meetings, but nothing is forthcoming.”  Gumbi has also laid a complaint with the BEE Commission.


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