Sishen community trust faces fraud probe

2013-10-20 10:00

One of the four trusts sharing the largesse of Kumba Iron Ore’s “Super Trust” for communities around the famous Sishen mine is under investigation for fraud.

The Sishen Iron Ore Company community development trust (SIOC-cdt), dubbed the Super Trust, is one of the biggest development trusts by value in South Africa.

The investigation is confirmed in a report by the Super Trust’s ethics committee.

The John Taolo Gaetsewe Development Trust (JTGDT), one of the four subtrusts tied to a local municipality in the Northern Cape, has been under investigation since 2011 following two emails from community members Happyboy Diseko and Thomas Phooko.

According to the document, “the (development trust) is under investigation for fraudulent behaviour with regard to mobile libraries, the procurement system in the trust (tenders etc), shareholding in mines and the funding of projects, among other things”.

An entity called Blue Thistle began investigating the trust in 2011. It is trying to find some correlation between the projects of the trust and the trustees of the board.

Super Trust spokesperson Baldwin Matsimela said they were aware of complaints from the community and have referred the complaints to the Kimberley Commercial Crime Investigation Unit (CCIU).

“We have informed the CCIU that should further information be made available to the SIOC (community development trust) deliberating on the substance of the complaints, the SIOC community development trust would be able to take the matter further in liaison with the JTGDT board,” said Matsimela.

Hawks spokesperson Captain Paul Romoloko confirmed that there was an investigation currently under way into the JTGDT.

Community leader Nelson Hantise told City Press that they were in the dark about the trust’s financial performance.

The first annual general meeting of the trust was held last year, allegedly only after the community complained to the internal fraud units of both Sishen and Kumba.

But Matsimela said there was no sinister motive for the timing of the annual general meeting.

“The JTGDT was adopted as a beneficiary trust during 2006 by the Super Trust,” he said. “Between 2006 and 2011, the Super Trust provided funding to the JTGDT to strengthen the operations and to kick-start community initiatives.

“The full redemption was towards the end of 2010 and JTGDT received its first full dividend during 2011 from the Super Trust.”

Another community member complained that there was no communication between the trustees and the community.

He said: “Many of the projects that were started are collapsing and no one cares.”

Hantise also complained that the community was not informed on how much money was being used and alleged that the people in charge of the trust pocket the money.

According to Matsimela, the Super Trust established a project management unit that monitors “the implementation of the projects and conducts periodic surveillance of the projects post-implementation as part of asset management”.

He added that the latest evaluation of the projects was conducted this year by an independent service provider.

The Super Trust does not put up financial statements, but Matsimela said the JTGDT disbursed an amount of more than R350?million since inception, while R87?million was paid out during the 2012 financial year.

When asked for financial statements for the 2012 and 2013 financial years, Matsimela said they would be out next month.

For 2011, the community was provided with an unaudited detailed income statement of the JTGDT and reported that they only spent R65?million on projects but had received R102?million for projects for the 2011 year.

The Super Trust 2011 annual report shows that R102.6?million had been approved for 15 projects in the 2011 financial year.

Another document detailed the projects the trust had undertaken by 2011, claiming expenditure of R163?million and counting 79?706 beneficiaries by 2011.

What is the Super Trust

The Sioc Community Development Trust, popularly known as the “Super Trust”, was officially launched on December 4 2008.

It was established when the former Kumba Resources was unbundled in September 2006 to form Exxaro and Kumba Iron Ore (Kumba).

Kumba is the majority shareholder in the trust, which owns iron ore mines in Thabazimbi (Limpopo) and Sisheng (Northern Cape).

The trust is the sole beneficiary of a 3% ordinary shareholding in Sioc, part of Kumba’s broad-based black economic empowerment programme, held by a special-purpose vehicle on its behalf.

According to Kumba Iron Ore’s financial reports, the trust has received about R1.87?billion in dividends since 2008.

Under the trust are four beneficiary trusts (according to its website): Gamagara Development Forum, John Taolo Gaetsewe Developmental Trust, Maphalane Disabled Children’s Trust and the Thabazimbi Community Development Forum.

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