AHL Group of companies and its mother company Admarc are at loggerheads over AHL’s call for some of its employees to opt for a voluntarily retrenchment pending a restructuring exercise.
Agricultural Development and Marketing Corporation (Admarc) board chairperson Alexander Kusamba Dzonzi has since said the AHL Group has embarked on the retrenchment exercise without Admarc’s blessings.
In a memorandum to all staff dated January 27, the AHL Group states that the company is undergoing restructuring to improve its performance but that the process will render some positions redundant.
Reads the memo in part: “As part of the process and in consideration of staff enquiries during company-wide staff meetings conducted between 13 and 19 January 2021, management is requesting interested employees to apply for a voluntary retrenchment.
“This offers an opportunity for members of staff who desire to be released voluntarily to apply. The voluntary retrenchment window will, therefore, be opened for a period of 14 calendar days effective Wednesday January 27 to February 9 2021.”
But in an interview yesterday, Dzonzi said they agreed with AHL Group that the company should submit its restructuring plan to the Admarc Board which would inturn submit to the Ministry of Finance for its scrutiny.
He said: “If AHL Group has started a voluntary retrenchment process, then it is doing so without the blessings of Admarc and the Ministry of Finance.
“They were supposed to submit their plan and after reviewing the plan, that is when the Ministry of Finance, through Admarc, would advise on the way forward on restructuring plan and merging of companies. As far as we are concerned, that remains a rumour.”
Dzonzi added that they do not see why AHL Group should retrench its employees now when government is trying to create one million jobs.
“There are two conflicting issues here: AHL Group is working under a government that aims to create one million jobs and retrenchment would be the last thing to effect. Secondly, the financial stress that Covid-19 has brought on our people are reasons that retrenchments have to be done wisely, maybe on under performers or those nearing retirement,” he said.
According to the board chairperson, the Admarc board expects to receive a preliminary report on the restructuring plan this week for it to meet possibly next week to discuss it.
When contacted yesterday, AHL Group public relations Manager Teresa Ndanga asked for more time to comment on the matter.
In the memo, the cash-stricken AHL Group of companies said the restructuring will involve merging and closing of some subsidiary companies as well as reviewing functional areas of the group for efficient delivery of its products and services.
The notice has come on the backdrop of serious financial challenges which have seen the company failing to pay its employees’ salaries for four months from September to December.
The challenges forced Admarc to bail the company out with K6 billion to pay off the employees’ salaries and to restructure the company and bring it back to levels of profitability.
In November 2020, the company embarked on a restructuring process aimed at retiring some members of staff and downsizing some of its subsidiaries.
AHL Group has previously attributed its financial woes to a hostile economic environment which led to huge drops in revenue.