Hawks probe massive theft from municipal workers’ pension fund
ALLEGED corruption, fraud, theft and mismanagement of hundreds of millions of rand from the Municipal Councillors’ Pension Fund (MCPF) have been referred to the Hawks by its curators.
It has also emerged that the Financial Sector Conduct Authority (FSCA) blocked the SA Local Authority (Sala) from investing some of its R16 billion in assets in four companies after it discovered that risk assessments had not been properly done.
Sala has about 20 000 members who are municipal workers.
Among the suspect transactions the pension fund curators Juanito Damons and Thabang Kekana have reported to the Hawks is the purchase of 11 vacant stands in Klerksdorp, North West, from Isago@N12 Development for R120m and MCPF’s decision to pay about R17m in VAT for the deal, despite the properties being registered in the fund’s name.
The matter has been referred to the Hawks in terms of the Prevention and Combating of Corrupt Activities Act’s provision of duty to report corrupt transactions.
So dire is the situation at the fund that the SA Local Government Association (Salga) has asked the national government to merge the MCPF with the Public Office Bearers Pension Fund, which caters for cabinet ministers, their deputies, premiers, MECs, MPs and provincial legislatures.
Documents show that Damons and Kekana instituted legal action to recover the R120m purchase price and the R16.8m MCPF paid for VAT, as no acceptable settlement could be reached with Isago for repayment of the money.
MCPF documents state that the 11 Isago properties were valued at R46.6m, and the fund also bought a 12th property valued at R40m for R65m.
The Pretoria-based attorneys who handled the transaction, Maluleke Seriti Makume Matlala (MSMM) Incorporated, have been referred to the Law Society of the Northern Provinces for investigation into “exorbitant” fees to the pension fund.
The Law Society’s members’ affairs department told the curators that it will assess the fees before an inspection of the law firm’s accounting records.
Salga chief executive Xolile George assured municipalities that “no development would take place until our monies are repaid”.
Damons and Kekana have also referred the purchase of the properties to the Hawks. An independent valuation of a Midrand office park found its “forced sale value” was nearly R42.9m, while its “fire sale value” was R55.1m”. This is in stark contrast to a purchase price of R70m paid by the MCPF,” reads the curators’ joint report, filed in the Gauteng High Court, Pretoria.
Some tenants are also in arrears with their rent. Last year FSCA successfully applied for the MCPF – which has nearly 6 000 members – to be placed under curatorship in the Gauteng High Court, Pretoria.
The Financial Sector Conduct Authority wants the Municipal Councillors’ Pension Fund to be placed under curatorship