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24.10.2007 Business & Finance

Trouble brews at Shell Ghana

By The Chronicle


Members of the Accra-Tema Shell Retailers Association on Tuesday stormed the head office of the oil company with red bands, attires and headgears to hold a meeting with management, aimed at explaining further a new system the company intends introducing effective 1st January, 2008.

The Managing Director of the company, Mr Daniel Nunoo, addressing the retailers of Shell Ghana Limited, remained resolute to an earlier correspondence the company sent out to them and maintained that they would not reverse their decisions.

The retailers from Accra-Tema, who claimed to be responsible for more than half of the company's sales, remained silent on the issue, according to The Chronicle.

Shell Ghana, the paper said, would not like to deal with the association but rather take on individual retail filling stations. This was seen by members as a way to disarm them.

Just before the 11th hour of the day, the meeting ended in a deadlock and according to the paper, the members relocated at a spot near the airport to brainstorm on what to do.

Already, they had lined up contingency plans on how to handle the matter and one of such was to place an embargo on the sale of V-Power.

The Chronicle said it gathered that none of the retailers was prepared to surrender to Shell.

“According to one of the reapplication forms sighted, certain requirements must be fulfilled. These included applicants' criminal record, if any; assets declaration, and record of being in business for at least 5 years. The applicant must be a degree holder and must be able to work between 6 and 7 days in a week.”

The Chairperson of the Accra-Tema Shell Retailers Association, Madam Esther Mullings, when asked of the next line of action, simply said, "We are going to meet our lawyers." It was to deliberate over Shell's threatening letter to the dealers and the solicitors' response also indicated that they were ready for a bust up.

Parts of the response read as follows:

RE: NOTICE OF INTENTION NOT TO RENEW DEALERSHIP AGREEMENT

I write as Solicitor for your Dealers operating in Ghana.

Your letter dated 8th October, 2007, seeking to terminate your relationship with my clients at the close of the year which was circulated to them has been referred to me with instructions to respond to same.

My clients say that they have operated their respective dealership with you for a period ranging between 10 and 35 years on the average thus helping your company to build and sustain its good reputation in the petroleum industry in Ghana.

My clients therefore say that the manner in which you are seeking to determine their relationship with you and the brevity of the notice given to that effect make your intended action unreasonable, unconscionable and most unfair. They see your action as capricious and oppressive.

To them, that is so for the following reasons:

1. Having regard to the huge capital required to keep them in business, they have been on the support of their bankers and their commitment to the said bankers cannot be discharged within the period of your notice.

2. Employees engaged by them to your knowledge and approval who have dedicated their energies to the success of the business over the years cannot be disengaged so abruptly.

The letter said among other things that the retailers were committed to their credit customers, particularly their industrial customers with who they have agreements which cannot be determined within the notice period.

“Outstanding debts owed by the afore-mentioned debtors will also require some time to recover.”

“In my clients' humble opinion, if you have to part ways after decades of dedicated services to you, it should not be with acrimony and it should also not saddle them with debts.

“I am therefore to pray you take urgent steps to rescind your decision and address my clients' concern for the benefit to all parties involved in this matter.”

In response on the same day, Shell Ghana in a letter signed by Daniel A. Nunoo, Managing Director/Country Chairman states that:

“We acknowledge receipt of your letter dated 19th October, 2007 on the above-named subject matter.

“In the first place, in order to properly deal with the issues raised by you in the letter under reference, we should be grateful if you let us know exactly who your clients are, giving their names and particulars of the service/filling stations they run.

“Secondly, at this stage, we would like to draw your attention to the fact that Shell Ghana Limited is not terminating the contract of any of her dealers. Shell Ghana Limited will simply not renew the existing agreements when they expire.

“We look forward to hearing from you at the earliest convenience.”

On Monday, Shell Ghana and the police undertook a mock exercise to protect the head office's properties as stated by the Managing Director, Daniel Nunoo.

He spoke on Joy FM in the early hours, saying that following a fight in the area of the head office, police officers from the Crowd Control Unit moved in to protect their properties.

The timing of the mock exercise, according to the retailers, was to cow them.

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