Cape Town - None of the money allegedly misappropriated in the R50million fraud case against the former chief executive of the South African Clothing and Textile Workers Union’s (Sactwu) health programme, Colleen Khumalo, was union money. It was donor funds that were allegedly embezzled.
This was the response from Sactwu’s general secretary Andre Kriel following the arrest of a third suspect in this matter. Kathegasin Padayachee, 53, yesterday briefly appeared in the Cape Town Magistrate’s Court on charges of fraud and was released on R10000 bail. He was not asked to plead.
Hawks spokesperson Philani Nkwalas confirmed the latest arrest. Khumalo, 51, is out on R20000 bail. A 37-year-old Zimbabwe-born US citizen, virologist and South African branch chief at the US Centers for Disease Control and Prevention, Dr Alfred Bere, is out on R100000 bail. The trio stand accused of mismanaging donor funds meant to help combat the spread of transmissible diseases.
Kriel said: “We have taken urgent steps to ensure that, in future, such union projects are properly administered and strictly accountable to the constitutional structures of the union. This includes tighter governance mechanisms, as well as stricter monitoring of donor funding intended for such projects,” he said.
The initial breakthrough in the case came last year after an investigation by the Directorate for Priority Crime (Hawks) into the allegations of the misappropriation of funds from the US. It is alleged that Khumalo misappropriated donor funds to the tune of R50million and purportedly submitted fraudulent invoices from different companies and NPOs.
Sharing his views on the impact of corruption, former trade unionist Tony Ehrenreich said that corruption and fraud negatively affected the credibility of any organisation and posed serious questions about the services delivered by that organisation.
Meanwhile, the general secretary of the Federation of Unions of South Africa (Fedusa), Dennis George, said: “The union has a social justice commitment to promote corporate governance and make sure its books are audited by an external auditor. The audit and risk committee identifies potential places where corruption could take place and puts mechanisms in place to prevent this.”
The case was adjourned by Magistrate Greg Jacobs to November 1 for further investigations and to allow the investigating officer time to obtain the relevant documents.