Workers’ fund wants R340m back
Claims of corruption and kickbacks in investment firm deal
MORE than two years after the South African Local Authorities (Sala) pension fund board was replaced under a cloud of suspicion of corruption, an investment deal involving about R340 million that was signed with Sampada Private Equity has come under the spotlight.
Allegations of possible corruption have surfaced at Sala pension fund, where a former official has been accused of accepting a sponsored trip to Spain to watch Barcelona football club play after a company secured a deal involving millions of rand.
The former official at Sala – a municipality fund with close to 20 000 members and assets worth R16 billion – also allegedly received an SUV gift for securing the deal.
At the centre of the allegations of impropriety is Sampada Private Equity, which some senior managers at the municipal fund claim entered into a questionable R340m deal with Sala in 2015.
The managers, who requested anonymity, want the deal terminated and the funds returned to Sala.
“Bafedile Mafologele is CEO of Sambada Private Equity and a shareholder at Umthombo Wealth Asset Managers. After leaving Novare Consultants, where he was a director, Mr Mafologele had long fostered a relationship with the then powerful Sala Pension Fund chairman, Mr Bongani Maphanga,” alleges the report compiled by the whistle-blowers.
The report accuses Mafologele and Maphanga of hatching the plan in which hundreds of millions were secured for a “private equity” investment in the form of “property investment”.
Whistle-blowers allege that in 2015 Mafologele set up a private equity company and registered it with the FSB, after which he was asked to present an investment proposal to the Sala Pension Fund. They claim that in August that year a hastily arranged fund exco meeting agreed to give Mafologele’s Sambada Private Equity R340m for a “property investment”.
The exco consisted of Wilberforce Kgakane (then principal officer), Bongani Maphanga (executive chairman), the deputy chairman and Lucas Mabila (head of monitoring). Also in the meeting was the fund’s legal adviser Thabo Thiba, its legal adviser and partner at Thipa Inc attorneys.
However, a few months later the Maphanga-led Sala board was replaced by the Financial Services Board with a section 26 board headed by Jan Mahlangu and advocate Matome Thulare.
Contacted for comment this week Mafologele denied any wrongdoing.
“An extensive due diligence was conducted by Sala’s investment advisers and its attorneys…
“They made their independent findings. We were subsequently appointed.”
He added: “Our appointment was without doubt above board.”
Citing confidentiality, Mafologele would not be drawn to say how much the deal involved.
The whistle-blower report alleges that soon after the contract was signed, Mafologele flew Maphanga to Barcelona, Spain, where he watched Barcelona play at the Camp Nou stadium. The report also alleges that Mafologele bought a “sleek Jeep Cherokee” for Maphanga.
Several calls to Maphanga went unanswered and text messages had not been responded to by time of publication.
However, Mafologele rubbished the allegations, saying: “It is reckless to even suggest that I would fly anyone to anywhere for their pleasure. Again this further illustrates my point that the person making these allegations has absolutely no clue on how asset management works.”
In terms of the Pension Fund Act there is a limit for any gift or gratuity to no more than R500 a year from any party.
Findings by Cape Town-based forensic group, ENSafrica, which was mandated to conduct an audit of the investment portfolio and management of the Sampada private equity fund, revealed deficiencies in financial reporting.
ENSafrica, which complained it was denied access to information, said: “The review highlighted significant concerns regarding deficiencies in financial reporting, high management fees and inaccurate manager expense allocation.
“We again tried to arrange access to Sampada information.”
Even though managers at the fund want to act to recover the money, the new Sala board chairman, Jan Mahlangu, denies any wrongdoing at the fund.
“We specifically record that we are not aware of any improper relationship between Sala and Sampada”.
Mahlangu added: “No member of the section 26 board has been involved in questionable or improper dealings which would jeopardise the fund nor is the section 26 board aware of any such questionable or improper conduct by it or any of its members.” – African News Agency (ANA)
THE REPORT ALLEGES THAT MAFOLOGELE BOUGHT A ‘SLEEK JEEP CHEROKEE’ FOR MAPHANGA