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Godongwana unaware of nature of scheme

Jan 29 2012 11:20 Nellie Brand Jonker

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Cape Town – He now wants to repay the money lent to the liquidated Canyon Springs Investments 12, as he had not known that it was clothing workers' retirement money.

This was said on Friday by Enoch Godongwana – former Deputy Minister of Economic Development and a shareholder in Canyon Springs – in his testimony about the affairs of the company.

He was currently unemployed, he said, but again declined to comment on whether his abrupt resignation as deputy minister two weeks ago was related to the Canyon case.

As a former union man he did do not wish to be associated with a scheme whose main purpose was to cream off workers' retirement funds, Godongwana said in concluding his testimony on Friday. He said he had got involved in Canyon Springs in good faith, and had not known what type of scheme it was.

His legal representative will negotiate with clothing workers' union Sactwu to repay “whatever is fair”.

Godongwana’s family has a 50% stake in Canyon Springs which, through the Trilinear Empowerment Trust (TET), obtained a loan of about R92m of clothing workers' retirement money. This money was to be invested in shares.

The loan was therefore unlawful and the trust's investment mandate was thereby contravened. Moreover, no loan agreement was concluded and the identity of the company was covered up for years, inter alia on the investment statements supplied to the retirement fund trustees.

Godongwana previously testified that in 2007, when he had become involved, he had known that the funding already available to Canyon Springs came from the Trilinear asset management company and was therefore probably pension monies. But he had not known that it was clothing workers' retirement funds or from the TET.

He became aware of the TET only when it asked for the loan to be repaid.

He said he had been an executive director of Canyon Springs for a year up to October 2008 and that annual salary had been R1 584m (R132 000 a month).

Among the questions put to him on Friday were questions relating to contradictions with regard to payment of his salary.

Advocate Gavin Woodland, who is leading the investigation on Sactwu’s behalf, showed him that he had received only R598 000 direct from Canyon Springs. On the first day of his testimony at the end of September last year Godongwana stated that he did not understand this.

Canyon Springs' bank statements show that the first payment of R132 000 was made to him at the end of November and the second on 18 December 2007. The payments then dried up, but exactly the same amount came to light as going to the Empirax company.

Empirax is a company belonging to Richard Kawie, a co-shareholder in Canyon Springs, who last year was charged with tax fraud related to money he received from the company. On Friday Godongwana claimed that Kawie was supposed to invest his salary from Canyon Springs in a KwaZulu-Natal construction project. When this project had failed, he had demanded his salary be returned.

Woodland asked him if it had been done in that way to avoid declaring it to parliament.

Godongwana joined Parliament in October 2008 and had therefore already resigned from Canyon Springs.

Empirax paid him four amounts totalling R710 000 between December and March 2009.

Godongwana denied this. “The principle would have been the same; I would have had to declare it,” he said.

Godongwana’s wife, Thandiwe, succeeded him as a director of Canyon Springs. Between July 2009 and April 2010 she received R418 323 direct from Canyon Springs. (Her salary was originally around R65 000 a month, but was subsequently reduced.) In 2009 she had also received R265 000 through Empirax.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

 
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