Clothing workers' pension money lost

Clothing workers' pension money lost

FMCG SUPPLIER NEWS

Fin24 - Jan 30th, 08:17

Cape Town – About R92m of clothing workers' retirement money that was lent to the liquidated Canyon Springs company is apparently irrecoverable.
 

Advocate Gavin Woodland, who is leading an investigation into the affairs of Canyon Springs on behalf of the clothing workers’ union, Sactwu, said his client accepts that almost the entire clothing workers' R470m retirement fund placed in the Trilinear Empowerment Trust (TET) could be lost.

Canyon Springs was only one of the companies to which the money went. Its debt, together with interest, amounts to R141m.

Woodland said the investigators had found that R25m (27%) of the R92m had gone to the Trilinear Specialised Finance (TSF) company as commission on the deal. He regards this money as probably irrecoverable.

TSF is part of the Trilinear group of companies belonging to Sam Buthelezi, who was arrested last month and charged with fraud.

The charge relates to R13m that was transferred, via Canyon Springs, to the company Leading Prospects and then to his family trust Pasima. This was allegedly disguised as loans.

Another R9m or so went via Canyon Springs to Richard Kawie, a fellow shareholder – according to Woodland for so-called consultation work.

Enoch Godongwana, former Deputy Minister of Economic Development and a Canyon shareholder, said he had been unaware of the commission paid to Buthelezi’s company or of the money Kawie had received.

He had been aware of what he had thought a genuine loan to Leading Prospects. Only in April last year had he found out about the Pasima trust when he was shown a document indicating that Leading Prospects had advanced the money to Pasima.

Godongwana had described the transaction commission to Buthelezi’s company as “excessive”.

Woodland said that Sactwu, too, did not regard Kawie’s commission as legitimate. “It was false and had nothing to do with real services.”

Another R25m-odd had gone to a Canyon wholly owned subsidiary, Pan African Benefit Services, which is insolvent, said Woodland. Pan African is the investment consultant to the retirement funds that put money into TET. Last week Pan African employees testified that Canyon Springs’ name had been disguised as Finco on the TET investment statements.

In 2010 Godongwana’s wife, Thandiwe, and Mohan Patel, a co-shareholder and director, had still denied the relationship between Canyon Springs, Pan African and the TET.

Godongwana said he believed Buthelezi and Kawie had together established the TET. He claimed they had “misled” the union into thinking it was a genuine empowerment trust.

Kawie allegedly presented himself as Sactwu’s national retirement fund coordinator so that he could persuade retirement funds to invest in the TET, but he had been merely a short-lived retirement fund consultant for the union.