Former Armajaro employees file case against Ecom in Ivory Coast

ABIDJAN, March 7 Fri Mar 7, 2014 11:57am EST

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ABIDJAN, March 7 (Reuters) - Former employees of commodities trader Armajaro Trading Ltd (ATL) in Ivory Coast have filed a legal case against Ecom, which is in the process of buying ATL, claiming they have not received severance packages owed to them, their representative said.

The 104 ex-employees say that ATL owes them 100 million to 200 million CFA francs ($211,000 to 422,000) after it wound down operations in August, months before the acquisition of the loss-making trading arm of London-based Armajaro Holdings Ltd by major cocoa trader Ecom Agroindustrial Corp.

"Our lawyer has presented a case before the labour tribunal of Abidjan against Ecom, which represents ATL now, for unfair dismissal and non-payment of bonuses," Mory Ouattara, head of the employees group, told Reuters on Friday.

"We are going to seize the cocoa stocks and even the bank accounts of Ecom if necessary," he said.

Ecom declined to comment.

It is the second legal challenge to hit Ecom that involves its acquisition of ATL, which was agreed in November but still requires approval from regulators in the European Union.

Ivory Coast's CCC cocoa regulator suspended Ecom's export licence last month after six cooperatives alleged that ATL had not paid them bonuses owed for premium cocoa production from the 2012-2013 season.

The cooperatives targeted Ecom, because ATL no longer has a presence in Ivory Coast, they said.

Armajaro warned in a letter to the CCC that the dispute could scupper its merger with Ecom.

According to Reuters calculations, Armajaro and Ecom have purchased on average 140,000 tonnes of cocoa beans a year in Ivory Coast, roughly a tenth of the crop.

Since the start of the 2013-2014 season in October, Zamacom, the local unit of Switzerland's Ecom, has purchased around 64,000 tonnes of beans, according to Reuters figures.

CCC and industry sources said Zamacom has around 15,000-20,000 tonnes of cocoa bean stocks since its exports were suspended on Feb. 4.

In a letter addressed to the head of the CCC and the ministers of social affairs and agriculture, and obtained by Reuters, the employees said that bonuses on the 2012-2013 crop, which had been approved by the company, were not paid as agreed. ($1 = 473.9570 CFA francs) (Writing by Daniel Flynn; Editing by Jane Baird)

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