Provident fund members tell court their trustees cannot be trusted
Investment in mall raises questions
Disgruntled members of the Chemical Industries National Provident Fund (CINPF) have approached the Pretoria High Court on an urgent basis in a desperate attempt to remove trustees of the fund over allegations of serious financial misconduct and mismanagement.
The applicants – Xolani Myandu, Matshidiso Sekhonyane, Thabang Molefe and Mzwandile Mpofu – say in the founding affidavit deposed by Mpofu on behalf of the group that they have reasonable suspicion that the fund’s trustees “have committed a material breach of their fiduciary obligations towards the provident fund and ultimately the broader community of its members”.
They also fear the funds entrusted to the trustees would be “dissipated and/or lost as a result of the improper conduct of the trustees”.
The applicants say their application was necessitated by a Sunday World report last month. This paper reported that a R250-million investment in KZN tycoon Vivian Reddy’s Kwadukuza Mall, sanctioned by the CINPF board of trustees, had raised a lot of questions.
Sunday World understands Reddy and CINPF agreed that the fund would buy a 49% stake in the mall, with the stake valued at R178-million, according to a letter of demand from Reddy’s lawyers. However, the board of trustees, led by unionist
Lucas Mashego and Ayanda Sithole, instructed the fund’s administrator Akani to pay R250-million for the stake.
Reddy has insisted that he did not receive
R250-million but R178-million and that total investment is R250-million, consisting of two components.
The balance of R78-million, according to Reddy and the fund, is still under the control of the CINPF, held in the attorney trust investment account “awaiting condition precedent”. The R250-million was paid to Reddy’s lawyers, Nike Pillay Inc. However, both Reddy and the fund claim Nike Pillay Inc represented the fund despite the firm having represented Reddy and his wife in separate matters.
The funds would be dissipated due to improper conduct
However, the applicants are not buying the explanation.
“The applicants request an interim interdict prohibiting the trustees of the provident fund from exercising any powers arising from their appointment as trustees pending the finalisation of the application for their removal as trustees from the board of the provident fund.”
The four also want access to the bank statement of the trust account of Nike Pillay Inc.
“In so far as Nike Pillay Inc, I submit the fund’s payment of R250-million into the trust account of Nike Pillay Inc places the fund in a position of the trust creditor of the firm,” Mpofu says. The CINPF is said to have assets of
R6-billion.