COSATU shocked at SACTWU Provident Fund allegations
The Congress of South African Trade Unions is outraged at the allegation that 25 000 clothing and textile workers are in serious danger of losing R100 million of the R420 million from five provident funds South African Clothing and Textile Workers Union members.
The funds' trustees have ordered Trilinear Capital, which manages the monies for the various affected provident funds, to return the assets "with immediate effect", and have sent the company a letter ending all business dealings.
This followed allegations that more than R100 million has disappeared from the funds, arising from an unsecured loan to a company, Canyon Springs Investments 12.
Canyon Springs' two directors are Mohan Patel and Thandi Godongwana and its shareholders are trusts set up by the Patel, Kawie and Godongwana families. Deputy Minister of Public Enterprises Enoch Godongwana was previously a Director of Canyon Springs but says he resigned from his business interests when he moved to national government in 2009.
He says that the deal between Canyon Springs and Trilinear was done substantially before he got involved with the company and that he was not guilty of any inappropriate or irregular behaviour.
In 2007 Trilinear Empowerment Trust agreed – verbally – to lend about R93m to Canyon Springs, so that it could buy an unnamed unlisted company but this never happened. The deal was put into writing two years later, after R58 million had already been handed over.
Canyon Springs was supposed to repay the loan in full, plus interest at prime plus 1.5% within 36 months, by March last year, but did not do so. Now it owes Trilinear Empowerment Trust about R100m. It has allegedly 'lost' the workers' money and now faces liquidation. The liquidation application was brought by the Trilinear Empowerment Trust and is due to be heard in the Cape Town High Court this week.
FSB spokesman Logan Ramalu is quoted in the Sunday Times saying that Trilinear`s licence was suspended from 15 November 2007 until 23 May 2008, for non-material non-compliance. “Yet,” says the report “it was still able to handle the union`s money, even advancing R4-million to Canyon Springs during this period”.
The federation welcomes the move by SACTWU to appoint a senior attorney to thoroughly and forensically investigate the matter and advise on steps to be taken to safeguard the interests of its members.
We clarify that the decisions to invest in Trilinear was not taken by SACTWU at all, but independently from the union by the Boards of Trustees of the various retirement funds, composed of 50% employee and 50% employer representatives.
If these allegations are proved to be true, it is absolutely shocking. Textile workers are the lowest paid workers in the whole of the manufacturing sector.
Whilst we note that these are still just allegations, we say that for a company to steal from such poor workers is not only illegalbut immoral. COSATU fully backs the call by SACTWU General Secretary Andre Kriel for "every single cent" to be returned, and his assurance that "no stone will be left unturned”. We fully agree with him that “if any guilt is proven, the guilty must go to jail for a long time".
Congress of South African Trade Unions