Edition: June / Aug 2017
Aftermath of Marikana
Mineworkers’ savings get shot in Bophelo while the
battle between Amcu and NUM flares in retirement funds.
All hell has broken loose on the North West platinum belt in the rivalry between the Association of Mineworkers & Construction Union, formed after the Marikana tragedy in August 2012, and the National Union of Mineworkers, displaced from its majority status on mines in the Rustenburg area.
It’s ominous that their rivalry now extends to the pension-fund space. That Amcu has set out to form its own retirement fund, in opposition to the Mineworkers Provident Fund traditionally comprising mainly NUM members, is the tip of an iceberg.
Below this tip, in danger territory, lie the mines’ participating employers in the funds long established for their employees: Anglo Platinum in the Amplats Group Provident Fund (Sibanye being admitted as principal employer from November, having bought certain Anglo Platinum mines) and Impala Platinum in the Implats Workers Provident Fund.
The Financial Services Board is also involved: first, through legal challenges respectively brought by both the Amplats and Implats funds concerning trustees; second, by the debacle at Mvunonala subsidiary Bophelo Benefit Services. It had failed to pay, from monies entrusted to it, mineworkers’ child dependents on them reaching adulthood.
Matters are being unceremoniously brought to a head. It was reported in March by City Press that Bophelo had lost R255m, and possibly as much as R560m, of money belonging to mineworkers in the Amplats fund. At much the same time, seven Implats fund trustees (said to be Amcu members) were arrested for allegedly having attempted to extort bribes from funeral-schemes operator Arian Solutions Group.
Two points are worth noting because they might become relevant as these matters progress. One is the Public Investment Corporation’s 30% ownership of Bophelo Insurance Group. The PIC’s significant stake would have offered comfort to Bophelo clients. The other is that nothing by the name of Arian or similar emerges from a search of FSB records. The FSB confirms that Arian Solutions Group is not a registered provider of financial services.
That said, the FSB deserves to feel uncomfortable. In order to avert another Fidentia disaster and for the protection funds’ beneficiaries, Pensions Registrar Dube Tshidi had been instrumental in the launch of beneficiary funds under FSB supervision. Yet again there’s something that smacks of Fidentia.
Further, in May the Registrar appointed a statutory manager to Bophelo Benefit Services and the Bophelo Beneficiary Fund. Making the announcement, the FSB said that last July it had “conducted a routine on-site visit on BBS and made certain findings in a preliminary report”. So there doesn’t appear to have been much preemptive action to avert what was destined to happen.
Then there’s the litigation.
In November the High Court in Johannesburg granted Anglo Platinum, the principal employer of the Amplats fund, an urgent order declaring that Salt Employee Benefits had not been appointed as administrator of the Amplats fund and that Devadasen Somiah had not been appointed as the fund’s principal officer.
Anglo Platinum finance director Ian Botha stated on affidavit that there’d been “considerable dissent” between trustees of the Amplats fund, endangering the fund’s “very existence”. The most important areas of dissent were the status of Salt, purportedly appointed by trustees as the fund’s new administrator, and of Somiah, purportedly appointed as the fund’s new principal officer.
Without finality to the disputes, Davis warned, there’d be “extremely dire consequences for the (Amplats fund) and for the many thousands of its members who are overwhelmingly (Anglo Platinum) employees”. The fund’s board had expeditiously to consider the offer by Sanlam for continuation of its administration services (i.e. not to be replaced by Salt) and to find a new principal officer on whom fund trustees could agree.
With the declaratory granted, normality is restored at Amplats. At least for now.
On the Implats fund, board abnormalities aren’t dissimilar. There’ll possibly soon be an appeal against the Registrar’s appointment of particular trustees. He’d effectively removed from office the trustees that the employer, Impala Platinum, had appointed. This was allegedly without the employer’s approval.
Such are the power struggles. As they wage, the supremacy of fund members’ best interests daren’t be the loser.