Edition: July 2016/ September 2016
Editorials

RIGHT OF REPLY

Curator states his case

Comments by Tony Mostert* in response to the cover story in the TT
edition of Dec ’15-Feb ’16 which argued that the 13-year curatorship
of the SA Commercial, Catering & Allied Workers Union national
provident fund (SNPF) was long enough.

The duration of the curatorship of a badly managed retirement fund, particularly where the trustees have failed to protect the Fund and its members from mismanagement, maladministration and fraud, cannot be decided simply by its term. There are many other considerations, which have been well-documented in reports and court papers accessible to Today’s Trustee which was ignored by Mr. Greenblo and not checked with me.

For any fund to be placed under curatorship reflects that there has been very serious abuse and a failure to meet the requirements of the Pension Fund Act. This was the case with the SNPF, with its approximate 1 000 participating employers and presently, approximately 100 000 members. The pension fund members had been taken advantage of and were severely prejudiced by the conduct of the former board of trustees.

The Fund was placed under curatorship by the Pretoria High Court on application by the Financial Services Board. Among other things the FSB alleged that senior Saccawu members had abused the fund to the detriment of its members. The twenty former trustees and the principal officer of the fund were removed by order of court and replaced with myself as curator. They allowed the fund to make irregular investments in a company established by the Union for its own illegal gain to the exclusion of Fund members. A payment directed to this company of fund money was channeled from an irregular payment of R100 million under the guise of a socially desirable investment. The then principal officer was permitted to use Fund assets for personal gain.

RULING BY PRESS OMBUD

TT apologises to Tony Mostert, curator of the Saccawu national provident fund, for inaccurately and unfairly having stated that his “latest available communication” to fund members was dated 24 August 2011 and that his report dated 31 October 2015 was the first in all the years of the fund’s curatorship to have been published on the FSB website, as well as for not having asked him to comment prior to publication.

In the article headlined ‘Indeterminate sentence – Registrar must please disclose why, and until when, the Saccawu fund needs the protection of a curator’ (Dec ’15-Feb ’16), we were critical of the long period of time that Mostert had been curator of the fund (13 years).

Mostert lodged a complaint with the Press Ombud who found that we were in breach of the Press Code regarding the matters that we hereby apologise for. The Ombud dismissed other parts of the complaint.

Read Mostert’s right of reply on this page. Also visit www.presscouncil.org.za for the Ombud’s full finding.

Further substantial abuses of the Fund were uncovered after the Fund was placed under curatorship resulting in numerous litigious claims which were strenuously opposed and the legal process was delayed and frustrated by the former trustees to prevent finality. The Fund’s claim against others in the involving the misuse of fund monies involving hundred of millions of Rands was frustrated by the former trustees in failing to render any cooperation. The Fund is still recovering millions of Rands from the Union after it had eventually obtained a final judgment against the Union.

In an effort to accelerate the return of the fund to normalcy a “shadow Board of 5 trustees” was appointed some years ago which were, nominated by the Union and Cosatu. This effort failed as the shadow trustees attempted to frustrate pending litigation to recover lost assets to avoid claims against the Union and investigations into the conduct of the precuratorship trustees. I am on record at least since 2010 stating that the Fund should come out of curatorship but I have demonstrated in reports to FSB and to court since then, the very sound reasons why the Fund has remained under curatorship.

Pretoria High Court judge Bertelsman in a judgment of April 2012 refusing to lift the curatorship of the Fund stated: “Good cause must be established to discharge the curator, which must clearly be shown to serve the interests of the Fund and its members better than a continuation of the curatorship would”.

The key issue that any court must decide in disbanding the curatorship is whether there will be a return to a situation where trustees would again be pressurised into doing the bidding of the Union, allowing the inappropriate diversion of assets into among other things, Union control and again placing the savings of members in jeopardy.

Despite the efforts to frustrate the curatorship more than R250 million has been recovered and the Fund has been placed in a far stronger and governance position with improved systems and structures to prevent or at least limit the reoccurrence of events which caused the fund to be under curatorship in the first place. A further challenge is ongoing fraud being committed by reason of the submission of false beneficiary claims, particularly with regard to Section 37C distribution. This would appear to be widespread fraud occurring in a number of Union related and municipal pension funds.

This Fund has an unfortunate history of delinquent principal officers, the last of which was dismissed in April 2015. It would appear that Today’s Trustee champions the cause of the former principal officer of the Fund and is most critical of the curatorship and its term yet giving little or no criticism of the numerous reasons for the Fund having been placed under curatorship involving the prejudice to its members of hundred of millions of Rands and not recognizing the challenges which the curator has faced due to the frustration of litigation by the former trustees and Union, all of whom are senior Union members, all of which is of record in reports and court papers but ignored by Mr. Greenblo for reasons only known to himself.