AHL Group has announced that it will close down four of its seven subsidiaries and lay off 480 workers in the process.
The companies to be closed include AHL Commodities Exchange, City Africa Limited, AHL Chemicals and Steel Limited.
The firm is closing the four companies because of financial woes that originated in 2017 when one of its companies, Malawi Leaf, registered a K42 billion loss.
AHL Group acting Chief Executive Officer Alfred Nkhono said Wednesday that the group will retrench 61 percent of its 787 employees as part of the restructuring process.
Nkhono revealed this on Wednesday when the Reserve Bank of Malawi (RBM) quizzed the group on K3.2 billion pension arrears.
The K3.2 billion AHL arrears are part of the K26.9 billion pension arrears different employers across the country are to remit.
“It has been a huge challenge for the business to survive since that time . We have not recovered.
“As a result of that, the group is undergoing a serious and massive restructuring,” Nkhono said.
He added that the AHL Group Board has approved the restructuring which will include settling of the pension arrears.
Meanwhile, the central bank has given AHL Group 21 days to settle the arrears.
RBM Chief Examiner, [Non-Prudential Compliance in the Pension and Insurance Supervision Department] Paul Nyirenda said AHL would be dragged to court if it fails to pay the pension contributions within 21 days.
Nyirenda said AHL failed to honour its payment plan to settle the arrears.
“If they fail to comply with that direction, basically what it means is that they have committed an offence in as far as the law is concerned,” Nyirenda said.
RBM published names of non-complying employers two years ago, forcing some employers to settle their arrears.
Mathews Kasanda is a journalist who holds a Bachelor of Arts in Journalism from University of Malawi (The Polytechnic).
In 2015, Media Institute of Southern Africa awarded him the Best Print Media Education Journalist of the Year accolade.
He joined Times Group Newsroom in September 2019.