JOHANNESBURG - More than two years after the South African Local Authorities (SALA) pension fund board was replaced under a cloud of suspicion of corruption, an investment deal involving about R340 million rand that was signed with Sampada Private Equity has come under the spotlight.
Allegations of possible corruption have surfaced at SALA pension fund where a former official has been accused of accepting a sponsored trip to Spain to watch Barcelona football club play after a company secured a deal involving millions of rand.
The former official at SALA - a municipality fund with close to 20,000 members and boasts assets worth R16 billion - also allegedly received an SUV as a gift for securing the deal.
At the centre of the allegations of impropriety is Sampada Private Equity, which some senior managers at the municipal fund claim entered into a questionable R340 million deal with SALA in 2015. The managers, who have requested anonymity, want the deal terminated and the funds returned to SALA.
“Bafedile Mafologele is the CEO of Sambada Private Equity and a shareholder at UMthombo Wealth Asset Managers. After leaving Novare Consultants where he was employed as a director, Mr Mafologele had long fostered a relationship with the then powerful SALA Pension Fund chairman Mr Bongani Maphanga,” alleges the report compiled by the whistleblowers.
The report accuses Mafologele and Maphanga of hatching the plan in which hundreds of million rand were secured for a “private equity” investment in the form of “property investment”.
Whistleblowers allege that in 2015 Mafologele set up a private equity company and registered it with the FSB after which he was requested to present an investment proposal to the SALA Pension Fund.
They further claim that in August that year a hastily arranged fund exco meeting sat and agreed to give Mafologele’s Sambada Private Equity R340 million for a proposed “property investment”.
The exco consisted Wilberforce Kgakane (then Principal Officer), Bongani Maphanga (Executive Chairman), the Deputy Chairman and Lucas Mabila (Head of Monitoring). Also in the meeting was the fund’s legal advisor Thabo Thiba, the fund’s legal advisor, a partner at Thipa Inc attorneys.
However, a few months later the Maphanga-led SALA board replaced by Financial Services Board with a section 26 board headed by Jan Mahlangu and Advocate Matome Thulare.
Contacted for comment this week Mafologele denied any wrongdoing. “An extensive due diligence was conducted by SALA’s investment advisors as well as its attorneys or our fund. They made their independent findings. We were subsequently appointed.”
He added: "Our appointment was without doubt above board”.
Citing confidentiality, Mafologele, would not be drawn to say how much the deal involved.
The whistleblower report alleges that soon after the contract was signed Mafologele flew Maphanga to Barcelona, Spain, where he watched Barcelona play at the Nou Camp stadium. The report also alleges that Mafologele bought a "sleek Jeep Cherokee" for Maphanga.
Several calls to Maphanga went unanswered and text messages have not been responded to.
However, Mafologele rubbished the allegations saying: “It is reckless to even suggest that I would fly anyone to anywhere for their pleasure. Again this further illustrates my point that the person making these allegations has absolutely no clue on how asset management works”.
In terms of the Pension Fund Act there is a limit for any gift or gratuity to no more than R500 per year from any party.
Findings by Cape Town-based forensic group, ENSAfrica, which was mandated to conduct an audit of the investment portfolio and management of the Sampada private equity fund, revealed deficiencies in financial reporting.
ENSAfrica, which complained it was denied access to information, said: “The review highlighted significant concerns regarding deficiencies in financial reporting, high management fees and inaccurate manager expense allocation. We again tried to arrange access to Sampada information”.
Even though managers at the fund want to act to recover the money, the new SALA board chairman, Jan Mahlangu, denies any wrongdoing at the fund.“We specifically record that we are not aware of any improper relationship between SALA and Sampada".
Mahlangu added: "No member of the section 26 board has been involved in questionable or improper dealings which would jeopardise the fund with anyone nor is the section 26 board aware of any such questionable or improper conduct concerning it or any of its members”.
African News Agency/ANA