Municipal union’s assets safe in battle against liquidation

SOUTH AFRICA’S largest municipal workers’ union has successfully warded off a provisional liquidation order in the high court in Pretoria, safeguarding its R166 million in unit assets.

The South African Municipal Workers Union (Samwu) was instructed to implement its winding-up after it was accused of owing an excess of R2.4m in legal debts.

Samwu general secretary Simon Mathe said the union was not insolvent as court papers “claimed” and judgment was granted in favour of the union, which vehemently fought the provisional order for liquidation.

The union was sued by its resident attorney after he accused it of trading in insolvent circumstances despite the contributions of more than 185 000 members countrywide. Each member was said to contribute R56 per month, which translates to R11m collectively.

“The judge indicated that the trade union can not be treated like a copyright body. We are adamant that we will not pay any invoices that seem suspicious. We will not pay the lawyer who initiated this process until such a time we have determined invoices to be legitimate,” said Mathe.

He said the union instituted forensic investigations into its financial affairs to carve away the fat and track unnecessary expenses to root out “corruption”.

“We will deal with officials harshly to fend off corruption. It’s a relief to our members. People have been celebrating our downfall even before the order was granted.

“This is a good Christmas present for our members,” he said.

The union’s legal representative David Maimane, of KD Maimane Attorneys, filed an urgent application to the high court in September, outlining reasons for the union’s liquidation.

The provisional order was issued earlier this month.

Maimane’s grounds for liquidation rested heavily on the R2.4m the union owed his legal firm.

The firm had been representing Samwu since 2009, involving cases which appeared before the Bargaining Council, Labour Court and the Labour Appeal Court.

According to Maimane’s version of events, the union cancelled some of his services in June.

The union wanted to conclude on all outstanding payments due to service providers and would not be able to do so if it was still accumulating invoices, court papers read.

When Maimane pursued the issue with the union’s national legal office, he said he was told to continue with existing matters but not take on new cases unless he received written instructions to do so.

During a meeting with the union, Maimane was apparently informed that it had been experiencing difficulties in collecting members’ contributions from employers.

“I offered my services and this was declined,” court papers read.

“In the circumstances, I believe that the respondent is in fact trading in insolvent circumstances and for that reason, it is imperative that liquidators be appointed.”