Trade union federation Fedusa has placed its General Secretary Dennis George on special leave pending a probe into the purchase of shares in AYO Technology Solutions.
Fedusa made the announcement at a media briefing on Wednesday in Roodepoort.
"An external investigation will be conducted to determine the veracity of the allegations," said Fedusa President Godfrey Selematsela.
George is a non-executive director of the JSE-listed IT services company. He told Fin24 on Wednesday afternoon that the federation informed him of its decision to put him on special leave on Monday, adding that he would cooperate with the investigation.
He said he was only facing "allegations", and denied personally benefiting from a rise in the AYO share price after it listed.
PIC commission of inquiry
A R4.3bn investment by state-asset manager the Public Investment Corporation in AYO in December 2017 has been picked apart in a judicial commission of inquiry into the PIC's investments.
Last week the corporation's suspended Assistant Portfolio Manager, Victor Seanie, testified that due diligence processes were allegedly bent in favour of the IT firm, saying the PIC's former CEO Dan Matjila rode roughshod over managers to see the deal through.
According to an article by amaBhungane, George may have benefited personally from the AYO deal via a company called Difeme Holdings which it reported received pre-listing AYO shares at R1.50 a share. The PIC acquired the AYO stock at R43 a share.
Fedusa said on Wednesday that it never gave any "mandate for the acquisition of shares from any company in the name of the trade union". The union dismissed what it called an attempt to link it to Difeme Holdings.
George, meanwhile, tweeted the day after the amaBhungane article was published that the news site would "deal with my lawyers".