Missing pensions may lead to prosecution

2011-06-20 07:01

Cape Town - Those involved in the alleged misinvestment of hundreds of millions of rands of clothing workers' provident fund money – which is being forensically investigated – could be criminally prosecuted.

There is concern that the retirement monies of thousands of clothing workers who are members of the Southern African Clothing and Textile Workers Union (Sactwu) could be irretrievably lost.

Over the weekend Sake24 reported that Cape company Canyon Springs Investments 12 – which received some of the money and is allegedly unable to repay more than R100m – has been put into provisional liquidation.

One of the directors of Canyon Springs is the wife of Enoch Godongwana, Deputy Minister of Economic Development. Court documents state that his family apparently owns an equal stake in the business.

Another application for provisional liquidation of the AltX-listed company Pinnacle Point Group [JSE:PNG] was lodged in the Western Cape High Court last week. Most of the provident fund money causing concern is invested in Pinnacle Point.

Sactwu has appointed Tony Canny, head of the forensic department at legal firm Eversheds, to conduct a forensic investigation.

Canny said his brief was first to establish whether some of the money could be recovered.

He said that Sactwu had given instructions for a forensic investigation into the entire matter – not only regarding Canyon Springs, but also regarding all the money from Sactwu members invested in Pinnacle Point and Grand Parade Investments [JSE:GPL].

Canny said he needed to establish whether any people were to be criminally prosecuted, so that the matter could be handed over to the authorities.

In 2007 the provident fund money was invested in the Trilinear Empowerment Trust, which was established by the Cape management company Trilinear founded by Sam Buthelezi.

Canny said that he did not have an exact figure, but R400m to R500n had been invested in the trust.

The Financial Services Board has already investigated whether the provident fund money was invested in the trust in contravention of the Pension Funds Act. A report on the investigation has been completed and Trilinear was to have responded to it by last Friday.

According to Canny, Sactwu has an interest in the case because the money Canyon Springs received belongs to clothing workers who are members of the union.

He reckons that a final order for liquidation of Canyon Springs is a strong possibility. The return date is in August.

Canny said that “certain people” were not cooperating in his investigation and that he would be in Cape Town again this week.

He said that although liquidation was not the ideal, an insolvency investigation would follow. People might then be called to a hearing to answer questions, even if by answering they should incriminate themselves.

- Sake24

  • clark - 2011-06-20 07:56

    - " May lead to a prosecution " - It most decidely should, but as per usual in this country it wont !

  • PB - 2011-06-20 08:04

    "Could" be prosecuted?!?!?! How about WILL BE prosecuted? Only in South Africa...

  • M5 - 2011-06-20 08:31

    As if they're not stealing enough already... Now they're ripping off pension funds!!!

  • croix - 2011-06-20 10:07

    What a country! Eish!

  • israel.cloete - 2011-06-20 10:52

    it's time we investigate the people that is employed by the unions who works with our monies

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