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JOHANNESBURG - The Federation of Unions of South Africa (Fedusa) has acknowledged the resignation of the Executive Head for Legal Counsel, Governance and Compliance, Ernest Nesane after the forensic investigation into VBS Mutual Bank discovered serious allegations of impropriety, in a statement on Monday. 

Nesane’s ouster from Africa’s largest fund manager managing R2.1trillion on behalf of chiefly government workers marked another step in the unfolding scandal that includes a complex web of auditors, politicians and the bank’s executives.

"The evidence discovered by the forensic investigation into VBS Mutual Bank last week, points to the fact of serious allegations of impropriety against Nesane, who served as one of the two Public Investment Corporation (PIC) - delegated Directors on the Board of VSB Mutual Bank. The VBS Mutual Bank was placed under curatorship by the regulator – the South African Reserve bank in March 2018 said Dennis George Fedusa General Secretary," according to  Fedusa.

"Earlier this year, another PIC – delegated Director on the VBS Mutual Board, Paul Magula was dismissed by the PIC for poor performance in relation to his duties and responsibilities towards the PIC. An Independent Senior Council chaired the disciplinary hearing. It is important to recognise that both Nesane and Magula have a duty of care to ensure they observe their fiduciary responsibilities relating to the business practices and apply the highest standards of ethics and good corporate governance," a statement from  Fedusa read. 

Fedusa said that their 6th National Congress adopted a firm resolution on corruption and fraud, therefore the Federation was bound to fight dishonesty, whether in the public or the private sector and to expose corrupt practices as well as name and shame directors, and have the guilty ones declared delinquent directors.    

Fedusa said in a statement, "In terms of Section 162 of the Companies Act, a company, a shareholder, a director, a company secretary or prescribed officer of a company, a registered trade union that represents employees of a company or another employee representative may apply to court for an order declaring a director delinquent or to place him under probation. It should be noted that a director who has resigned from a company or a director who has been removed cannot escape a court order from being issued against him in terms of Section 162. Fedusa calls on the PIC in terms of Section 162 to have both Mr Nesane and Mr Magula declared delinquent directors for failing to apply the highest standards of ethics and good corporate governance. The effect of an order which declares a director delinquent is that the director is disqualified from being a director of a company in terms of Section 69(8)(a) in future, concluded George."