Workers’ REP weighs in on PSPF’s Eswatini Mobile shares
MBABANE – A senior trade unionist who represents NAPSAWU in the PSPF Board, Celumusa Tembe, praises the Fund for acquiring shares from Eswatini Mobile.
Tembe, the exSecretary General of the National Public Service and Allied Workers Union, said he would report to his principals tomorrow on why PSPF bought the shares.
He described the acquisition of the shares as a very good business decision, which would go a long way in bettering the health of the Fund.
He said the Retirement Funds Act allows Boards to take investment decisions on behalf of the membership. Representing the interests of the workers, he said Eswatini Mobile’s business model and prospects for growth made him and his colleagues in the Board take a decision to invest in the cellular company.
He said the establishment of an Eswatini owned company was good for the consumer as the competitor, Eswatini MTN, also produced products to retain customers as the competition became stiffer.
DISCLOSE
He said he would disclose to his principals the amount of money the Fund spent on acquisition of the 48.8 per cent shareholding. Tembe said it was an open secret that the telecommunication industry has remained one of a few that continued to generate a profit.
He said workers should be proud of the fact that they have a stake at Eswatini Mobile.
“As you are aware that you go to Eswatini Mobile whenever if you want convenient and sufficient data for communication,” he said.
Thulani Hlatshwayo, the Secretary General of NAPSAWU, said they would wait for Tembe to report back to them.
Elkan Makhanya, the Director Corporate Services, said the mandate of the organisation is to grow the Fund by investing in entities that are doing well in the market and those which show potential and prospects for growth.
He said the Fund would not be in a position to pay liabilities if there was no investment. One of the liabilities of the Fund, Makhanya said, was to ensure payment of benefits for beneficiaries.
DILIGENCE
He said they followed the right process and applied due diligence as required by law when they acquired the shares from Eswatini Mobile.
Makhanya said they would disclose the amount of money they spent on the acquisition of the shares in due course.
“That’s not a secret,” he said. Section 19 ( 1) of the Retirement Funds Act provides that a retirement fund’s investment shall be invested in accordance with the Regulations.
The Fund can also invest with the employer.
“A retirement fund may invest part of its assets in the business of an employer or in any subsidiary company or holding company of the employer provided that the amount invested shall not exceed the amount prescribed by the Regulations from time to time,” reads subsection ( 2) of Section 19.
Section 11 ( 1) of the Retirement Fund Regulations provides that the management Board shall ensure that the fund’s assets are invested in a manner that complies with the criteria in Schedule 1 and Schedule 1A.
In its annual report for the year ending March 31, 2020, the PSPF recorded E308 852 178 as an opening carrying value for Eswatini Mobile while a sum of E102 155 850 reflects in the financial books as unrealised fair value gains.
DEPRECIATION
Investopedia defines the carrying amount, also known as carrying value, as the cost of an asset less accumulated depreciation while fair value gains refer to the changes in the value of the entity’s assets and liabilities over the course of the year.
Elliot Mkhatshwa, the President of the PSPF Pensioners, said he was not aware of any acquisition of shares from Eswatini Mobile.
Asked if the Fund has an obligation to report any merger or acquisition of shares to them, the president said the entity belonged to them, not government, so they should know everything that is happening there.
He said the management and Board were actually hired by them and stakeholders in the public service to manage the Fund. As a result, he said they ought to know before the management and Board could approve of any merger or acquisition of shares or equities.
He said the Board did not help them as members of the Fund as it has partnered with management in turning the organisation into a fully fledged government company.
“I am hearing this from you for the first time that PSPF partly owns Eswatini Mobile,” he said.
He said government was legally obligaged to contribute 15 per cent of an employee’s basic salary to the Fund and the employer pays five percent on a monthly basis to make a total contribution of 20 per cent.
“The 20 per cent of the basic salary which the worker and government jointly contribute to the Fund belongs to the employee, not government. In short, the employees must have a big say in the manner in which is operated and managed,” Mkhatshwa said.
He said the Fund has all along been placed under Category B of public enterprises, meaning government did not have full control of it. However, he lamented that it was transferred to Category A by the Cabinet of the deceased former Prime Minister Sibusiso Barnabas Dlamini.
He said the transfer of the PSPF to Category A meant that government was in full control of it.
PARLIAMENT
“Parliament resolved that the Fund should be reversed to Category B, but Cabinet disobeyed the resolution of the House,” he said.
According to a notice published by the Eswatini Competition Commission ( ECC), PSPF acquired control over Eswatini Mobile with 48.8 per cent shareholding.
ECC said the transaction was approved without conditions. It said the post- merger, market shares, market concentration, countervailing power and barriers to entry would not be affected, hence the transaction was unlikely to result in the substantial lessening or prevention of competition.
In the application for the shares acquisition, ECC considered the products of the firms and concluded that the relevant market was the provision of mobile telephone network services and related business in Eswatini.
It, however, observed that there
were overlaps between the activities of the merging firms as PSPF was already a shareholder of Eswatini Mobile.
The Fund is constituted by all civil servants of the Eswatini Government who are its members. It must be said that PSPF is a defined benefit Fund established for the management and administration of pensions for government ( public sector) employees.
It provides the following products retirement annuities, death benefits, disability benefits and other pensionrelated benefits for members and their dependants.
The assets of the Fund consist of contributions made by its members and government ( as their employer) as well as from yields from investments of the Fund.
The PSPF has an ownership stake in various business enterprises actively engaged in real estate leasing, hospitality and forestry.
The Fund has 78.3 per cent equity holding in Swazi Empowerment Limited, an investment holding company registered in the country with a 19 per cent stake in Eswatini MTN.
It also has a 50 per cent shareholding in The New Mall ( Proprietary) Limited, an unlisted property company registered in Eswatini.
With effect from July 1, 2013, PSPF had a 50 per cent shareholding in Emprop Limited, an unlisted property company registered in the country.
It has 35 per cent equity holding in Swaziland Property Investments Limited, a property holding company registered in Eswatini and listed on the Eswatini Stock Exchange.
With effect from 2015, the Fund had a 100 per cent shareholding in Libuyile Properties ( Properties) Limited, an unlisted property company registered in the country.
PSPF has a 38.46 per cent shareholding in Montigny Investments Limited, and Montigny Property Holdings Limited unlisted companies registered in Eswatini.
It owns the Hilton Garden Inn. The current hotel’s evaluation is E504 830 034.