Mint Connect, South Africa’s low-cost cellphone supplier, appears to be on the verge of collapse after its holding company CZ Technologies disinvested from the joint venture.
The company, which supplies cheap cellphones to several retailers including Pep, Mr Price, MTN and Telkom stores, has failed to pay its employees since the company missed the August pay day.
The company was meant to manufacture the low-cost cellphones locally but has failed to do so and instead opted for importing cheap mobile devices from China.
City Press has seen letters which reveal that in August the company, formerly owned by former SA Revenue Service commissioner Oupa Magashula and entrepreneurs Rob Bruggeman and Sagran Pillay, promised but failed to pay its 34 employees that month.
Instead it issued retrenchment notices last month.
In a notice of retrenchment dated October 15, Mint Connect informed its workers that, based on operational requirements, their services would be terminated immediately.
“Mint Mobile (Pty) Ltd and the employee agree that the employment of the employee with Mint Mobile will terminate with immediate effect due to the employee having accepted retrenchment from the company. Accordingly, it is certified and agreed that the employee’s employment terminates due to retrenchment. It is recorded that the employee was not in any manner forced or coerced to conclude this agreement,” the notice read.
However, the financial woes appear to run deeper, with the company writing another letter a week later – on October 21 – informing the employees that their outstanding salaries would only be paid once it had received funding from CZ Technologies.
“Dear all, following our meeting of the salary negotiations, it was stated that August salaries shall be paid on September 18. It has become evident that this was never so.
“As we indicated in the meeting that we are in discussions with CZ [Technologies] to help us with finance for the salaries, we discovered on Friday, which was the due date of the release of funds, that we needed to provide them with additional information to conclude our loan agreement with them,” the letter reads.
It adds: “This has caused the delay in the release of funds to Mint and thus caused the delay in the release of your salaries. While we note your disappointment and frustration, we are equally, if not more, disappointed and are working very hard to ensure that the situation is rectified.
“Please accept our apology yet again for the delay caused and be assured that we will send further communication to advise on the new date once all paperwork is in place with CZ, which should be before the end of this week.”
However, three employees who spoke to City Press on condition of anonymity said they had not been paid for the past three months and were being given endless empty promises.
“They [Mint] keep on lying to us and we don’t believe them,” said one employee.
As the financial woes deepen, CZ Technologies chairperson Magashula said the company had cut ties with Mint Technologies. This was after a share swop deal which saw a trust owned by Mint Technologies COO Pillay surrender its shares to CZ in return for a controlling stake in Mint Mobile.
Pillay said: “We intended manufacturing phones at CZ in 2013 as this was a recognised electronics manufacturer. But due to volumes being too low to justify a manufacturing plant, we resorted to designing phones in South Africa and manufacturing in China to maintain an affordable pricing model.
“The management at Mint is of the opinion that all information as requested should be directed to CZ for comment . They were the holding company when the majority of the issues took place.”