Johannesburg - The provisional curatorship of the National Union of Metalworkers of SA (Numsa)-owned insurance company 3Sixty Life is still in limbo.
The controversial curatorship was placed by the Gauteng High Court in Johannesburg on December 21, 2021.
The curatorship stunned companies in the field when a few days before Christmas the Prudential Authority (PA) placed 3Sixty Life under curatorship with sketchy reasons while white-owned insurance companies which were accused of corruption have missed the PA’s attention.
While a curatorship is given by court, the PA has the power to decide whether a company should be placed in curatorship.
It is believed that 3sixty Life’s victimisation may be linked to its Numsa ownership. Numsa, one of the biggest unions in South Africa, has been vocal about government’s slow efforts at promoting the rights of workers.
Khandani Msibi is known to be the strength behind union powerhouse Irvin Jim.
Eight months in limbo, the process first ruled on as urgent was still in limbo. It has been eight months of provisional curatorship and five months of waiting for judgment.
Msibi told The Star yesterday that 3Sixty was in good shape and could meet its claims and overhead obligations.
“The problem is that the company is prevented from acquiring new clients which in turn will affect its performance in the long run, ” Msibi said.
"Ordinarily when you look at other insurance companies that have been places on provisional curatorship, they were quickly liquidated but with us we have (been kept waiting) for eight months.
“This proves that there were no liquidity issues as alleged by the PA, notwithstanding we had made plans to recapitalise after the Covid-19 situation. There was no need to be placed under curatorship and the provisional curator confirmed this in court," he said.
Msibi said they were still awaiting the judge to make a final determination on the matter.
“We have argued in court that the PA misled the court when it was given an order of curatorship.
“The curator also stated under oath that curatorship was unwarranted and the motive of those who placed 3Sixty Life under curatorship must be questioned. These statements are in her affidavit which are in her papers submitted to court.”
The process of curatorship is a mechanism through which a business is afforded an opportunity to get its affairs in order to avoid potential business rescue or liquidation.
There has been indications that the South African Reserve Bank (Sarb) through the PA is targeting black-owned companies. Three black insurance companies have been affected and the last black-owned bank, UBank, has been merged into the African Bank.
In an article by Siphesihle Jele, chairperson of the Independent Liberation and Allied Workers Union (ILAWU). argued that the decision by the PA to place 3Sixty Life and other companies under curatorship served to confirm such suspicions.
"The PA ignored the recapitalisation of 3Sixty Life by the group to transfer R130 million of unencumbered real estate of the Doves Group into 3Sixty Life. This offer was ignored and they proceeded to apply for curatorship without explaining to the court that there is a recapitalisation plan they did not consider, "Jele wrote.
Msibi said 3Sixty Life would never have failed – without the continued onslaught by regulators.
“... it is all white-owned insurance companies colluding and, of course, colluding against black insurance companies – add to that the unfair treatment of black insurance companies by the regulators and you will appreciate the difficulty we experience,” Msibi said.
"How do you keep a business under curatorship for over eight months when this process is not designed to take this long, when we didn’t fold as PA expected they should have withdrawn the case and admit they were wrong,” Msibi said.
Msibi added that black businesses were targeted and singled out as corrupt and inefficient.
“Black business in this country is under siege, the whole BBBEE (Broad-based Black Economic Empowerment) has long collapsed, white companies claim higher BBBEE scores but have not developed black businesses in their industries. How can banks get high BBBEE ratings when they haven’t created black banks?
“Insurance companies haven’t created black insurance companies, medical aid administrators haven’t created black medical aid administrators, can they really claim enterprise development in industries they cant run?
“Three black insurance companies were destroyed by the PA and none of the empowering insurance companies came to assist. It’s a charade .... ” Msibi added.
Numerous attempts to obtain a comment from the Prudential Authority proved unsuccessful.