Court halts dubious takeover of R6billion pension fund.

By Staff Reporter

Bassie Maisela, group chief executive officer of NBC Holding has vowed: “NBC will carry on serving and protecting its members’ interests with diligence. Our ultimate aim as a company is to exceed our loyal clients’ expectations at all times.

“NBC is member-driven and will not remain, passive observers, when members’ hard-earned retirement savings are threatened by irregular activities and unscrupulous individuals who do not act in the best interests of its clients’ pension funds at all times.”

Maisela was reacting to the full bench judgment, authored by High Court Judge LR Adams, on the fight to control workers’ pension funds.

The company stated it felt a great sense of vindication following the decision by the High Court in Joburg. The court reviewed and set aside the 2019 appointment of Akani Holdings as the administrator of more than R6 billion workers’ pension fund.

Maisela added: “NBC Holdings was found not to have litigated against the CINPF purely for commercial reasons. The full bench ruled that NBC together with the aggrieved members have acted in the broader public interest of the CINPF, its tens of thousands of members and clean administration in the pension fund industry.”

The court found the 2019 takeover by Akani Holdings was connected to the payment of bribes to three trustees of the Chemical Industries National Provident Fund (CINPF). CINPF is associated with “blue-collar workers”, most of whom are members of the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu).

Within a week after the appointment of Akani to administer the massively high-income fund, as the court found, the principal officer at CINPF Bonginhlanhla Dangazele who is now deceased, Reginald Sema the then chairman of the board and Ayanda Sithole were recipients of amounts which vary between R25,000 and R40,000. These payments from Neighbour Funeral Scheme (NFS) – an entity which the court found to be linked to Akani – occurred within an hour of each other.

Dangazele, Sema and Sithole had argued the payments were proceeds of claims in accordance with the terms of funeral policies upon the deaths of the kith and kin.

“Despite the remarkable coincidence that they all three lost ‘family members’ within weeks of one another and all received their payments on the same day, they failed to state how they are in fact related to the deceased. 

“The version which Akani and the CINPF want the court to accept is that Messrs Dangazele, Sema and Sithole all subscribed for funeral policies from NFS, all in August 2019, and all independently of one another, notwithstanding that there are 11 100 registered FAIS representatives licensed to sell funeral policies in South Africa,” the court pointed out.

“There is no explanation as to why, of all the funeral policy vendors in the country, all three obtained funeral policies within days of one another, from the same one. This, despite the fact that Mr Dangazele lives in Durban, while Messrs Sema and Sithole in Kempton Park and Orange Farm. Respectively and NFS are based in Kempton Park, Gauteng.”

The court took into consideration the submission made by NBC Holdings that the three officials were compensated for “death benefit claims” following the deaths of people clearly unrelated to them.

The court also remarked the CINPF: “…is a pension fund worth billions of rands in pension fund money, held on behalf of its members, predominantly blue-collar workers in the chemical, pulp and paper and pharmaceutical industries”.

In concluding the matter, the full bench of the High Court in Johannesburg has found that:

• The decision of the board of the CINPF made on 21 and 22 November 2019 to terminate NBC Holdings’ services was reviewed and set aside.

• The CINPF’s decision to appoint new service providers to provide fund administration, fund consulting, investment consulting and actuarial services was reviewed and set aside.

• The individuals who occupied the chairperson and vice-chairperson positions when the CINPF took these decisions are to be removed as trustees of the CINPF and the CINPF has been directed to replace the trustees in accordance with the CINPF’s rules.

Reacting to the judgement, industry observer, Surprise Seema said: “South Africans are understandably fed-up with corruption. I believe this judgment, under-reported as it was in the news-media, actually carries more significance in its emphasis on what criminology’s ‘broken window theory has always held untoward behaviour left unchecked leads to further decay and undermining of laws and values. Fortunately for us as a country, the broken window in this instance was swiftly attended to by a robust system of judicial recourse. And we’re all the better for it.

“The judgment was nothing short of a judicial save from a VBS-like capture of a fund started 35 years ago, with the transformation of the pension benefits industry and worker control at its heart,” Seema concluded. 

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