Public Protector Advocate Busisiwe Mkhwebane’s adverse ruling against the Financial Sector Conduct Authority (FSCA), formerly the Financial Services Board, was heavily reliant on information from a known criminal who looted millions from a series of pension funds in dodgy deals.
The affidavit is contained in the FSCA’s court application to set aside Mkhwebane’s report, which was released in March.
Mkhwebane ruled in favour of EFF leader Julius Malema’s complaint against the FSCA’s management over its alleged preference of a certain law firm to be appointed as a curator in the affairs of the financial sector authority.
Former FSCA executive Advocate Dube Tshidi, in his review application, submitted a scathing 59-page affidavit in which he accused Mkhwebane of having ignored FSCA and his own replying affidavits to allegations made against them by the EFF.
Like Public Enterprises Minister Pravin Gordhan, Tshidi also argued that the allegations emanated 10 years ago, saying Mkhwebane only has jurisdiction to investigate matters which happened within the past two years. Tshidi said Mkhwebane had failed to provide them with “special circumstances” which led her office to investigate him and the FSCA.
According to Mkhwebane’s ruling, Tshidi acted improperly in his nomination of Anthony Louis Mostert as a curator to administer certain pension funds, but he vehemently denied it.
In his affidavit Tshidi said Malema initially approached the FSCA with his complaint and it emerged that the EFF’s leader’s main source of the allegations was Simon John Nash, allegedly one of the chief participants in a criminal pension surplus-stripping scheme, known as “the Ghavalas scheme”.
Tshidi said the FSCA’s inspectorate has exposed the scheme in the 2000s.
“Mr Nash is currently facing criminal charges of fraud, theft and breach of fiduciary duties relating to his involvement in the surplus-stripping scheme implemented in two pension funds for which Mr Mostert was appointed curator, one of which was later placed into liquidation.
“Not only were the allegations the same as those previously articulated by Mr Nash in various public fora and in litigation against the FSCA, but when I met Mr Julius Malema and other EFF officials to address their allegations, they were accompanied by Mr Nash.
“I insisted that Mr Nash be excluded from the meeting given that there was pending litigation between him and the FSCA,” Tshidi said.
“As the curator and liquidator of the targeted pension funds, Mr Mostert is actively pursuing the recovery of millions of rands of misappropriated assets from Mr Nash and his company, Midmacor Industries,” Tshidi said.
He said Nash had been subject to prosecution for his involvement in the Ghavalas scheme since 2010 and the matter was still before court.
Tshidi said Nash’s motive to approach the EFF for assistance was motivated by a desire to obstruct the civil claims against him.
In his affidavit, Tshidi drew the court’s attention to various high court rulings which imposed an interdict for making similar allegations, which formed part of Mkhwebane’s ruling.
He gave the court five different adverse rulings against Nash.
In one of the rulings, Judge Elias Matojane said: “Nash’s conduct in this application is typical of his modus operandi, which involves making unsubstantiated malicious allegations without any proof.
“The defamatory statements by Nash are not made honestly and in good faith and are not supported by any evidence. They are a retaliation against Mostert for uncovering Nash’s fraud and corruption as highlighted by the findings of Heaton Nichols J,” Judge Matojane said.
Mkhwebane is expected to file a replying affidavit and the matter has been set down for November this year.