Probe into provident fund ‘misinvestment’

2011-06-20 07:50

The parties involved in the alleged misinvestment of hundreds of millions of rands of clothing workers’ provident fund money – which is being forensically investigated – could be criminally prosecuted.

There is concern that the retirement money of thousands of clothing workers who are members of trade union Sactwu could be irretrievably lost.

Over the weekend Sake24 reported that Cape company Canyon Springs Investments 12 – which received some of the money and is allegedly unable to repay more than R100?million – has been put into provisional liquidation.

One of the directors of Canyon Springs is the wife of Enoch Godongwana, deputy minister of economic development. Court documents state that his family apparently owns an equal stake in the business.

Another application for provisional liquidation of the AltX-listed company Pinnacle Point Group was lodged in the Western Cape High Court last week.

Most of the provident fund money causing concern is invested in Pinnacle Point.

Sactwu has appointed Tony Canny, head of the forensic department at legal firm Eversheds, to conduct a forensic investigation.

Canny said his brief was first to establish whether some of the money could be recovered.
He said that Sactwu had given instructions for a forensic investigation into the entire matter – not only regarding Canyon Springs, but also regarding all the money from Sactwu members that was invested in Pinnacle Point and Grand Parade Investments.

Canny said he needed to establish whether any people were to be criminally prosecuted, so that the matter could be handed over to the authorities.

In 2007 the provident fund money was invested in the Trilinear Empowerment Trust, which was established by the Cape management company Trilinear founded by Sam Buthelezi.

Canny said that he did not have an exact figure, but R400 million to R500 million had been invested in the trust.

The Financial Services Board has already investigated whether the provident fund money was invested in the trust in contravention of the Pension Funds Act.

A report on the investigation has been completed and Trilinear was to have responded to it by last Friday.

According to Canny, Sactwu has an interest in the case because the money that Canyon Springs received belongs to clothing workers who are members of the union.

He reckons that a final order for liquidation of Canyon Springs is a strong possibility. The return date is in August.

Canny said that “certain people” were not cooperating in his investigation and that he would be in Cape Town again this week.

He said that although liquidation was not the ideal, an insolvency investigation would follow.

People might then be called to a hearing to answer questions, even if by answering they should incriminate themselves.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.