Cape Town - For one and a half days, the 10th national congress of the National Union of Metalworkers (Numsa) was closed to the media. The reason: money. Or more specifically, the discussion about the union’s finances and current position of its investment company NIC.
Investment companies have always been a thorny issue within the labour movement. How, it is argued, can an organisation of workers, opposing the exploitation of workers, be part of a company that profits off other workers?
It is a sound argument, especially from federations such as Cosatu that express clear hostility to the capitalist system and claim to support “socialism”. However, by 1996 and the advent of what most Cosatu unions and Numsa condemn as the start of the “1996 class project” union investment companies mushroomed.
Among the Cosatu unions that took this route was Numsa. The union joined mineworkers’ union NUM; education, health and allied workers’ union Nehawu; and others in establishing investment vehicles. All with the expressed purpose of providing financial and other benefits to members.
Some companies were extremely successful, perhaps none more so than the mineworkers’ investment company (MIC) and the chemical, paper and wood union’s CIC. Their success comes mainly through equity investments in what the labour movement critics have often referred to as the “capitalist casino”, the Johannesburg Securities Exchange.
MIC and the clothing and textile union Sactwu's company also did well through holdings in Hosken Consolidated Investments (HCI). In the process, critics point out that the pioneers of some of these companies, such as Marcel Golding and Irene Charnley of NUM and John Copelyn of Sactwu became billionaires.
However, the Numsa Investment Company (NIC) did not initially fare well and almost became a major cropper in 2008, with R250m in liabilities and liquidation looming. Part of the problem was the close linkage between the company and the union that could have made Numsa responsible for the company’s liabilities.
Lessons were quickly learned. The Manufacturing Workers’ Investment Trust that set up the NIC and the NIC itself managed a major turn-round. Revenue, at R411m was up 12% in the six months to June this year, making for a pre-tax profit of R44m.
The NIC now controls three entities - a property group, an industrial holdings company and, centrally, the 3Sixty Financial Services Group. The latter was established in 2006 after the NIC acquired the Doves Group Holdings, one of the largest funeral services companies in the region.
Today, NIC investments include wholly owned subsidiaries in health care administration (Sechaba), insurance (Union Life and Numsa Financial Services), internet services (UiPlay) and cremation services (ICSA). Most recently, as part of its programme of expansion and diversification, the NIC acquired a 30% stake in the MoFaya Beverage Company.
Why debate about these issues should be held behind closed doors is difficult to understand. But, as one senior official noted: “Comrade, money matters are always difficult.”
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