Johannesburg - Cosatu’s retail and services affiliate Saccawu faces liquidation unless it scrambles to find millions of rand in the next 10 days, after losing the final round of a court battle that has lasted for years.
The SA Commercial, Catering and Allied Workers’ Union, which has over 170 000 members, has until March 9 to raise between R20 million and R30m. This is to pay back money owed to a union investment company that Saccawu itself set up, which has since been liquidated, and related legal costs.
“We are devising a plan to pay the money. We don’t know the exact amount because we don’t know what the legal costs are,” Saccawu deputy general secretary Mduduzi Mbongwe told Independent Media yesterday.
While Mbongwe maintained he was confident that the union would find the money, sources in Saccawu said leaders were “panicking”.
“They are writing to staff appealing for calm. Some staff are worried they won’t get their salaries,” said a senior union official who did not want to be named.
He claimed that Saccawu’s former president Amos Mothapo, who is now the union’s benefits co-ordinator, was appealing to service providers, including Old Mutual, to bail out the union. Old Mutual, the former administrator of the Saccawu National Provident Fund (SNPF), was accused by the Financial Services Board (FSB) of contravening the fund’s rules in 2002 by making irregular payments to trustees.
However, the approach to union service providers was denied by Mbongwe, and Mothapo would not be drawn on the matter, referring queries to the union’s secretariat.
Mbongwe also denied allegations that union property had already been attached ahead of the pending liquidation.
Saccawu, founded in 1975 as the Commercial Catering and Allied Workers’ Union, has been in trouble for more than a decade. It has been in and out of court over the misappropriation of money since the SNPF was placed under curatorship by the FSB in 2002.
Its legal battle to avoid paying back the millions it was being sued for by Saccawu Investment Holdings, a liquidated company which siphoned provident fund money back to the union, ended in the Constitutional Court earlier this month.
According to Anthony Mostert, curator of the SNPF, the union has so far refused to repay loans irregularly taken from the provident fund. Its argument had been that the money was not loans, but donations.
However, this was not accepted by the courts and the union finally admitted that it had been economical with the truth to avoid high taxes. Since the start of his curatorship in 2002, Mostert has uncovered millions of rand of dodgy dealings involving the union and companies linked to it.
According to a statement issued by the FSB at the time, the curatorship followed an investigation which found that the provident fund’s principal, Abe Mosiuoa, had allegedly made a number of unauthorised payments from the trustee expenditure account.
Also R1 a month per member was collected by Old Mutual, and paid into a “trustee expense reserve account” for trustees’ expenses, even though there was no provision in the rules for such payments. There also were unauthorised and fraudulent expenses incurred at the fund’s expense, prejudicing members.
According to Mostert, this was only the tip of the iceberg. He later found that the union had established a trust which in turn established a number of companies which acted as a conduit for the union to siphon provident money to itself.
Independent Media approached the FSB, specifically to answer questions over why there had been no successful criminal charges following this large-scale corruption. The board asked for more time to formulate a response, and had not done this by the time of going to press.
Although the union’s leadership has been unhappy about Mostert’s curatorship, even going to court to attempt to get it revoked, Mostert said under his guidance the provident fund had increased from R2 billion to R6bn. “Since being placed under curatorship, they (Saccawu) have refused to co-operate. It’s strange because this is the money of their members. It’s all about self-interest at the top. They were the architects of their own demise.”
Pretoria News