Hunt for workers’ money hots up

http://www.iol.co.za/business/business-news/hunt-for-workers-money-hots-up-1.1227487

Hunt for workers’ money hots up

February 5 2012 at 04:18pm

By YAZEED KAMALDIEN

A trade union’s hunt for its missing millions, invested in two separate funds, is heating up, with a commission of inquiry into one of the companies, Pinnacle Point Group, set to start tomorrow (February 6).

The SA Clothing and Textile Workers Union (Sactwu) has been battling to regain workers’ pensions totalling R360 million.

Tomorrow the Cape Town offices of law firm Edward Nathan Sonnenbergs will be the venue for the latest inquiry around shares in Pinnacle, worth R260m, bought by Sactwu. These shares are now reportedly not worth a cent after the property developer went bust.

A second inquiry has been unfolding to recoup R100m from Canyon Springs Investments 12. This insolvent company borrowed the money from Trilinear Empowerment Trust, which held workers’ provident fund savings.

Andre Kriel, general secretary for Sactwu, told Weekend Argus the union would consider legal action “after due process”, so that the “guilty go to jail for a long time”.

“You eat an elephant bit by bit. We will recover the money bit by bit. Even though it’s unpalatable, we’re prepared for a long process,” he added.

The Canyon Springs inquiry has already been through five rounds of interrogation in Cape Town, with the last session running from January 24 to 30.

This inquiry is led by Tony Canny, head of forensics at law firm Eversheds, and has revealed that Canyon Springs borrowed the cash from Trilinear without a proper loan agreement, nor a repayment date. It has failed to repay a cent.

Former deputy minister of economic development Enoch Godongwana and his wife Thandiwe were Canyon Springs directors. Kriel said Godongwana confirmed during an inquiry session that he would repay some funds.

“We are in talks with Godongwana on how much will be paid. Our eyes are focused on what happened, and we want to recover as much as possible,” he said.

Kriel added that the union had also received repayment pledges from other companies linked to Canyon Springs.

“Workers will get all their money that they have invested. We are going to search every corner for this money.”

They had, however, discovered that some of the money had been sent overseas.

“We are going to pursue that,” said Kriel.

On the repayment pledges, Kriel said they hoped to recover money “directly from people involved, and through the sale of assets of Canyon Springs”.

“The owner of another company that worked with Canyon Springs will repay R4m. A Canyon Springs subsidiary will repay R10m.”

While this was a small sum in relation to the total, he said it was a start.

Kriel explained that the provident funds were managed by an independent boards of trustees, half of whom were employee trustees, and the remainder employer trustees. Investment decisions were taken by them.

“These investment decisions have never been discussed in the union structures, nor has it in any way been taken by the union structures,” Kriel said.

But he added that the workers’ savings should never have been invested in Pinnacle Point, “because it builds golf courses which are playgrounds for the rich”.

“We are looking inside the union as to why this happened. We are doing an internal reflection.”

He confirmed that “not all the retirement fund monies have been lost”.

“I have been assured by the respective retirement funds that they still have enough funds left to pay every single worker who retires the full share of what withdrawal benefits are due to them. The rumour that is being spread that workers have lost their lifesavings is mischievous,” Kriel charged.

Countrywide, the savings of 25 000 workers had been affected by the Canyon Springs debacle. The union represents 100 000 workers nationally.

A stumbling block in the Canyon Springs inquiry is that the two main protagonists involved in the alleged fund fraud are unwilling to appear for questioning.

Canny said Richard Kawie, who acted as a Sactwu consultant, did not appear before the inquiry’s last session. Kawie had received R9m, and was directly linked to the flow of money between Trilinear, Canyon Springs and his business entities.

Kawie has been arrested in connection with fraud and is out on bail.

Sam Buthelezi, owner of asset management company Trilinear, has “refused to co-operate”.

He was also arrested in connection with fraud and is out on bail.

Canny said they wanted to push on with their investigation to find “poor textile workers’ monies that have been lost”.

“The people responsible must be pursued. We are waiting for instructions from Sactwu to continue with the inquiry,” he added.

Meanwhile,

Kriel said the union was “considering what next step to take”.

“The inquiry has revealed what has happened with the money, and where it has gone to. We have a good idea of what has happened with that.

“Our primary objective (now) is to help recover as much monies as possible, and to prosecute those who are found guilty of any wrongdoing.”

The DA said on Friday that it would contact the police’s commercial branch to investigate Godongwana’s “dishonesty”.

Haniff Hoosen, the party’s spokesman on economic development, said the DA had already laid charges against Godongwana.

“Godongwana has claimed that he was an innocent bystander in the stealing of workers’ pension funds.

“His actions suggest the opposite… These are hardworking citizens, and vultures have stolen their money. These are the reasons why poverty will continue,” Hoosen said, adding that he would also ensure that Godongwana and Economic Development Minister Ebrahim Patel account to Parliament’s economic development portfolio committee.

He added that Sactwu “must be held responsible for getting the money back”.

“Ultimately the union should be held responsible for what happened.

“It can’t be right that workers entrust unions with their life savings, and then the union says that they have done their best to get the money back.”

Cosatu general secretary Zwelinzima Vavi said in his January 26 speech at the launch of independent corruption watchdog Corruption Watch that trade unionists “know that unions are not paragons of virtue”.

“Workers’ pension funds are being gambled away, leaving some workers to retire with only a pittance. We must leave no stone unturned to bring those who squandered R100m to justice,” said Vavi.

“Some workers complain that their leaders have been corrupted, and that trade union officials are paid off by employers to turn a blind eye to their abuse.

“This type of corruption results in a situation whereby we have agents of the capitalist class within the workers’ movement who labour day and night as conveyor belts for capitalist interests,” Vavi said.

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About Yazeed Kamaldien

Self-employed journalist and photographer from South Africa.

2 responses to “Hunt for workers’ money hots up”

  1. yasserbooley says :

    Thank you for the information. Am I correct in thinking that there are moves in KZN to make it law for politicians to disclose their financial/ business interests?

  2. Yazeed Kamaldien says :

    It has been law for a while now. All politicians should declare their business interests. The former deputy economic minister involved in this scandal resigned from his job because of his involvement in this business deal.

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