The Financial Sector Conduct Authority (FSCA) has taken further steps against retirement fund administrator N-e-F-G Administrators of Vanderbijlpark, following the appointment of Krishen Sukdev as statutory manager in May last year. However, it says about half a billion rands of retirement fund assets are unaccounted for or “unrealisable”.
In an report released on Friday on progress sorting out the affairs of the troubled company, the FSCA says it withdrew N-e-F-G’s license as a financial services provider on 22 December 2021, after the entity went into business rescue owing to financial distress.
It says the statutory manager has provided reports, which have established the following:
- The monies or assets of members of retirement funds being administered by N-e-FG Administrators were transferred to various entities without the permission or knowledge of the funds, and in clear violation of the investment mandates.
- Furthermore, members were misled about where their monies or assets were invested and the value of their investments over a period of time.
- The estimated value of missing monies or assets is around R470 million. There is unfortunately a high risk of further losses, as the whereabouts and value of all of these assets are currently unknown, or where known, appear unrealisable at this stage.
- To reduce further prejudice to members, the boards of all N-e-FG Administrators retirement funds placed a moratorium on the payment of benefits.
- The current focus is on bringing those responsible to account, and to seek recovery of monies or assets by the statutory manager to the extent possible.
- The new management of N-e-FG Administrators continued to use member contributions for expenses other than what is permitted in terms of the rules of the retirement funds and contractually allowed for by retirement funds.
The FSCA says it has considered the reports by the statutory manager in a serious light, and has undertaken the following steps:
- The FSCA has revoked the boards of certain retirement funds administered by N-e-FG Administrators whose members had provided false statements to the FSCA regarding their independence. The FSCA is in the process of reconstituting these boards to enable the retirement funds to assist the statutory manager in pursuing the missing monies or assets, as part of their fiduciary duties.
- A directive has been issued to N-e-FG Administrators and its managing director instructing the managing director to immediately relinquish his position at N-e-FG Administrators and as its official bank account signatory.
- The FSCA initiated an investigation into the entity, which is at an advanced stage. Further steps may be taken once that investigation is finalised.
As part of its regulatory oversight, the FSCA is in constant contact with the statutory manager to assess developments. The statutory manager is available to engage with concerned members of the public and has recently, together with the FSCA, met with a group of affected persons and provided them with details of a criminal case opened against N-e-FG Administrators and/or its management by Lion Insurance Company, with the South African Police Services.
Anyone wishing to contact the statutory manager can do so at [email protected]
PERSONAL FINANCE