By Bruce Cameron
Alexander Forbes, the country's largest pension fund administrator, is facing a R1,1-billion claim from seven retirement funds because of the role it played in stripping millions of rands out of the surpluses of the funds in the 1990s.
Summons was served on Alexander Forbes by Tony Mostert and David Wandrag, the co-curators of the funds, on Friday.
Former senior executives of Alexander Forbes also face criminal charges for their role in the surplus stripping.
In 2006 Alexander Forbes was also involved in a massive secret profits scandal arising mainly by bulking the bank accounts of the many funds it administered. It then kept most of the additional interest earned.
The scandal, which was exposed by Independent Newspapers' publication Personal Finance in 2006, led to a Financial Services Board investigation and the repayment of about R500-million by Alexander Forbes to the affected funds.
However, many of the affected retirement funds are not satisfied with the interest calculations done by Alexander Forbes on the secret profits repaid and are suing for extra money. If they are successful, Alexander Forbes will have to repay more than double what it has already paid.
Other retirement funds are also demanding additional cash for the housing loan scheme that Alexander Forbes provides to members and from which it also made secret profits.
Alexander Forbes refuses to comment on any reports written by Personal Finance or its editor, claiming that both are conducting a vendetta against the company.
The latest claim against Alexander Forbes has been brought on behalf of the Mitchell Cotts, Lucas, Picbel, two Datakor, Cortech and Sable retirement funds.
Alexander Forbes was the administrator of the Lifecare Group Holdings pension fund through which millions of rands in surplus funds stripped from the seven funds were channelled to be paid to the employers sponsoring the retirement funds.
The Lifecare retirement fund received millions of rands for al-lowing itself to be used as a conduit by Alexander Forbes and the various employers.
The co-curators, in their supporting claim documents, said the conduct of Alexander Forbes was "wrongful, intentional or negligent and/or in breach" of Alexander Forbes's common law and statutory duties applicable to the Lifecare fund and/or the seven funds and their assets.
They also claim that various sections of the Pension Funds Act were contravened by Alexander Forbes in the stripping of the surpluses, which was also done without the proper approval of the Financial Services Board.
The co-curators want Alexander Forbes to pay restitution to funds for any amounts not otherwise recovered plus interest at a rate of 15,5 percent, totalling about R1,1-billion.