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Reebok Reenters South Africa, Four Years After Dispeling Rumors

February 15, 1994 GMT

NEW YORK (AP) _ Reebok International Ltd. said Tuesday it will reenter South Africa, four years after the athletic shoe maker was forced to dispel rumors it was conducting business in the then-outcast nation.

Reebok also said it will contribute hundreds of thousands of dollars to local enterprises and human rights causes in South Africa.

Reebok’s Worldwide Operations executive vice president John Duerden said the company decided to return there following African National Congress President Nelson Mandela’s plea to the U.N. for the lifting of all remaining economic sanctions.

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Reebok, based in the Boston suburb of Stoughton, Mass., said it will open a joint-venture distribution company with a South African group, First Africa Marketing Investment.

The new company, Reebok South Africa, will be 55 percent owned by Reebok International, with the other 45 percent divided between the five principal shareholders of the investment company.

The new company plans to open its first store in March and aims to manufacture footwear in South Africa within 18 months.

Reebok divested from South Africa in 1987 following the United Nations’ imposition of anti-apartheid sanctions. However, rumors persisted that Reebok had remained there, mainly because its product showed up there.

The company and others said it was possible that Reebok products were shipped legally to some other nation and then slipped into South Africa without the company’s knowledge.

In 1990, the company fought with Massachusetts and got it to admit Reebok was incorrectly listed as doing business in South Africa and thus barred from doing business in the state.

The company was irate, saying it had withdrawn from South Africa, sponsored a human rights concert tour by Amnesty International in 1987 and donated money to South African activist organizations.

It also lined up testimonials from anti-apartheid activists that the company was not involved with the pariah nation.

″I don’t think Reebok was there,″ said Richard V. Knight, a research associate with the Africa Fund, an anti-apartheid group, who vouched for Reebok in 1990. ″The cost would have been too great for them.″

Knight also recommended that companies return to South Africa and he commended those companies that change their work place for the better.

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″It’s time to go back. We do feel companies need to go back and address the legacies of apartheid,″ Knight said. ″Companies shouldn’t go back and do business as usual.″

Reebok didn’t reveal how much it plans to invest in the new South African business, but said it will contribute $125,000 to a group working to ensure South Africa’s first democratic elections in April are free and fair.

Reebok also pledged that its South African company will contribute 6 percent of its pre-tax earnings to local philanthropies devoted to community activities. Reebok International has guaranteed that this contribution will be at least $240,000 over the first three years of the company’s operation.

Reebok South Africa also expects to invest at least 2 percent of its pre- tax earnings for additional grass roots, sports and recreational projects.

Duerden said the new company will employ a multiracial staff of 30, promote the use of black sales agencies and ensure that human rights are present in all its associated companies.