Massive job cuts at AHL Group

Financially struggling AHL Group, formerly Auction Holdings Limited,  has announced that it is retrenching some of its employees.

The company has failed to pay its employees for over four months due to financial hardships facing the group.

AHL Group, which owns and manages the country’s tobacco marketing floors and a commodity exchange among others, is owned 42 percent by the Malawi Government through Agricultural Development and Marketing Corporation (Admarc).

Admarc recently gave a AHL a K6 billion bailout.

A meeting to determine the decision by AHL group on whether or not it  will retrench some of its employees is expected to be held today.

AHL called for voluntary retrenchment following its decision to restructure the company, giving staff members 14 days effective January 27 to February 9 this year.

In his Cut-the-Chaff  newspaper column,  Ephraim Munthali traces the problems of AHL when late president Bingu wa Mutharika had been having a bitter feud with international tobacco buyers operating in Malawi over what Bingu believed were exploitative prices at the auction.

He writes: “The battle became so bad that Bingu later ordered the deportation of some tobacco buyer executives. In his anger, Bingu was convinced that he can do without them and when that failed and prices started crushing, Bingu knew the political cost to him and his party would be high.

“Suddenly, there was talk of establishing a locally-owned “indigenous” tobacco merchant that would take the green gold to the global market.

“The Bingu administration must have nudged Admarc—whose board and chief executive officer were Democratic Progressive Party supporters—to push AHL into setting up a tobacco buying company.”

The  columnist pointed out that the board of AHL—a company 100 percent owned by Admarc—and whose board also had links to the ruling party, quickly facilitated the idea. And just like that Malawi Leaf Limited, wholly owned by AHL, was born.

But  he noted that several important things were conveniently overlooked and those issues are haunting AHL Group today.