Samwu ‘plundered coffers’
Money meant for striking members was used to cover operational costs and to buy T-shirts
THE embattled South African Municipal Workers’ Union (Samwu) has admitted that the workers’ coffers have been plundered by almost R88 million in just three years, but dismissed reports that it has less than R1 000 in the bank.
Reports emerged this week that a damning forensic investigation revealed that millions of rands put aside for Samwu’s striking members were redirected to cover some of the union’s operational costs and to buy T-shirts.
The forensic investigation into five allegations of misappropriation and irregularities of the union’s finances was conducted by accounting firm Ernst & Young in 2016, but was kept under lock and key until recently.
In a statement from its secretariat, Samwu – whose top officials were holding a special central executive committee meeting this week – said the auditors had confirmed that the union had eight bank accounts in 2012, some unknown to its top officials.
The union said the accounts had a combined balance of just more than R94.5m by November 3, 2015, but had drastically decreased. The balance was more than R6.2m, not the R538 which had been widely reported in the media.
“The auditors have found evidence of irregularities and fraudulent activities that have contributed to the drastic decline in the union’s bank balances,” it said.
“They have further highlighted that the decline in bank balances was compounded by the fact that the union was spending more than it
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received in terms of member subscriptions, noting that the union does not have any other revenue-generating stream and thus relies solely on what is received from municipalities.”
Samwu blamed its former president, Pule Molalenyane, whom it accused of concealing crucial information about the union’s operations from its officials.
“Ernst & Young completed the audit and presented the audit report to the union’s former president, Pule Molalenyane. This report, however, was never presented to any of the union’s structures,” the union said.
“According to Ernst & Young, Molalenyane is the only person who had access to the report, a report which was later leaked to the public.”
Samwu also said that the auditors had recommended the union establish a panel of legal firms to avoid paying astronomical fees to lawyers. It has paid more than R120m to law firms since 2012.