Vavi and the great provident fund rip-off Moyagabo Maake, Front Page, Sunday Times, Johannesburg, 6 October, 2013 Trade union federation COSATU's investment arm, Kopano ke Matla, plundered millions of rands from an employee provident fund, according to a secret Financial Services Board report that is likely to heap more pressure on suspended secretary-general Zwelinzima Vavi. The report, prepared by FSB investigators, recommends that the damning findings be reported to the South African Police Service so it can probe the "unusual and suspicious transactions and payments". Tembisa Marele, a spokesman for the financial regulator, confirmed that the report had been handed to the authorities. Kopano Employee Benefits (KEB), one of the companies under Kopano ke Matla, has also been stripped of its licence to administer pension funds. The report raises awkward questions about whether Vavi, a self-styled corruption-buster and board member of Corruption Watch, puts his money where his mouth is. It states that he was personally alerted to these problems in 2010 but did not act on them, and then apparently sanctioned a R2-million settlement designed to make the matter go away. Neither Vavi nor COSATU responded to questions from the Sunday Times this week, [other than the two grovelling interviews with Vavi published on the inside pages of the same edition of the Sunday Times]. The FSB report paints a startling picture of how officials plundered the retirement savings of 400000 former Bophuthatswana employees held by the Bosele provident fund. It says they conspired with Wesley Kgomo - who was acting as a consultant to Bosele and supposedly tracing beneficiaries - and lawyer Thabo Thipa to suck as much cash as possible out of Bosele while "administering" the fund for the beneficiaries. Over three years, more than R123-million was paid to the Kopano companies by Bosele - R56.3-million of which found its way to Nasieyah Basadien or her husband. Basadien was managing director of KEB. According to the FSB report, the couple paid R6.9-million to Kgomo and other amounts to members of Bosele's board of trustees. More startling, however, is a claim by the FSB that Vavi was alerted to the plundering three years ago. But he did not act. Bosele, which had R787.4-million in assets by 2011, was spun off from the Bophuthatswana National Provident Fund, which all private sector employers in the former homeland were compelled to join until homelands were abolished. More than 400000 people are beneficiaries of the fund. In June, Vavi's detractors in COSATU were pushing for action against him over the cover-up of the secret FSB report. [It is part of the facilitated process that is now close to completion]. Today, the Sunday Times can reveal that it alleges: . Kopano Employee Benefits (KEB) had "no administration capability and materially failed to comply" with FSB rules. . Kopano's other company, Kopano ke Matla Financial Services (KKMFS), broke the law because it "conducted unapproved pension fund administration business"; . KEB's appointment in 2007 as Bosele's administrator was "flawed, irregular and suspicious". At the time, it was "no more than a shell and did not employ any staff or even operate a banking account"; . In 2009, when the FSB began asking questions about how it was appointed, KEB officials conspired with Kgomo and Thipa to "fabricate" minutes of a meeting in September 2007 supposedly authorising the appointment; . Kopano CEO Collin Matjila, who is also an Eskom board member, received R1.33-million in cash from the Bosele fund through his company Summerlane - payments he described as "personal commissions" when confronted by FSB inspectors; . In 2007, Bosele's former administrator, Alexander Forbes, raised concerns about the large "set-up fees" paid to Kgomo by Bosele, which were then "quickly disbursed by means of cash cheques". Bosele's board of trustees promptly fired Alexander Forbes; . Basadien's husband was paid more than R26-million by KKMFS through a company called Datalab, ostensibly for work done for Bosele. He got another R27-million of Bosele's money through another company, Southern Ambition; . B-Direct, a company owned by Basadien and Matjila, was paid more than R2-million by Bosele, R1.16-million of which was paid back to KKMFS as "secondment charges". The FSB believes that B-Direct's sole purpose was to launder rewards, because it "could not find any evidence" it did any real business; . Kgomo's company, Westside Trading, was paid R90-million by Bosele, but the FSB could not find proof that there was any proper service delivery; and . Basadien offered Kgomo a R7.2-million reward if he could find a way to increase the fees paid to KEB through a questionable "feasibility study". Kopano's fees were subsequently hiked by about 600%. The web of corruption started to unravel in 2009 when KEB's then-acting CEO, S Woodman, informed the FSB pension fund registrar that KEB was running short of cash and did not have the funds to comply with the liquidity and professional indemnity requirements needed to keep its administration licence. "Given the magnitude of fees paid by Bosele to KKMFS and KEB, it was peculiar that KEB was suffering from liquidity problems," investigators said in the report. The FSB then began probing Kopano's companies - and Matjila fired Woodman for his trouble. In May 2010, KEB's contract with Bosele ended and Alexander Forbes was rehired. Kgomo demanded he be paid out "rewards" he was still owed. This led to "settlement talks", in which the R2-million settlement agreement was drawn up. The parties never settled because the FSB investigation had begun. This week, Thipa denied the report's findings against him. "I'm innocent of any insinuation of wrongdoing. The investigator of the FSB made false and adverse allegations against me without me being heard." Basadien, Kgomo and Matjila ignored requests for comment. This is not the first time Kopano ke Matla has embarrassed COSATU, the sole beneficiary of any money it makes. Last year, it emerged that despite COSATU's campaign against e-tolls, Kopano was invested in a company, Raubex, which built [e-toll] roads for the Gauteng freeway improvement project. From: http://www.timeslive.co.za/politics/2013/10/06/COSATU-and-the-great-providen t-fund-rip-off1 -- -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. 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