Paul Kirk
Prince Gideon Zulu, the KwaZulu-Natal MEC for welfare, is apparently allowing a close friend to sell state pensioners private funeral policies at pension pay points across the province.
The private insurance scheme does not make a provision for policyholders to designate a beneficiary, entitling its operators to pay out their takings to whomever they please when policyholders die.
The funeral policies, the brainchild of a company called Cornerstone, have been slated by the Black Sash Trust, which says it has fielded many complaints from the families of deceased pensioners who have not been paid out. The trust said this week that while it had no evidence Zulu had masterminded the deal, there was no way it could have continued without his knowledge.
Cornerstone is headed by one-time Inkatha Freedom Party strongman Musa Myeni, the party’s former Gauteng head and a close personal friend of Zulu’s. Myeni tied up the Cornerstone contract with the provincial government and with Cash Paymaster Services (CPS), the company that handles KwaZulu- Natal’s pension pay-outs. As the Mail & Guardian reported last week, CPS has been paying money into an account belonging to Zulu’s daughter – a revelation which this week prompted calls from opposition parties in the province for a full-scale investigation.
CPS is tied closely to the Cornerstone scheme. Apart from giving Cornerstone the contract, and allowing it to distribute its application forms at pension pay-out points, CPS also deducts Cornerstone policyholders’ R10 to R20 membership fees from their state pension pay-outs, and then forwards the money to Cornerstone.
Myeni this week defended his decision not to give policyholders the opportunity to nominate a beneficiary, saying: “Fuck. We will pay out to whom we want. We decide who the beneficiary is.”
Cornerstone marketing manager Jacques Boschoff also defended this bizarre policy, saying it was the only way his company could deal effectively with the extended family system that operates in rural Zululand. Said Boschoff: “We have to accommodate the Third World way of doing things. It is impossible to view this from a First World point of view.”
Cornerstone started operating the scheme in 1995, and has signed on nearly 70E000 pensioners. The forms on which the Cornerstone policies are printed are only in English, despite the fact that the policies are sold almost exclusively in rural Zululand.
Black Sash representative Ashnie Padarath says a study by her foundation has shown many pensioners believed that if they did not sign the documents they would not receive their pensions, as they believed the forms were life certificates or other forms of routine administration forms relating to pension pay-outs.
Padarath says the foundation has no evidence that Zulu gave Cornerstone the contract, but “Cornerstone could not carry out this practice without the knowledge and approval of Gideon Zulu. Why do Cornerstone not have any competitors in such a seemingly lucrative industry? Something is rotten here.”
Padarath says the foundation has “had a large number of complaints about this. People are being conned. What is even more perturbing is that this is not the first time both the premier of KwaZulu-Natal and the national minister of welfare have remained tight-lipped on this and other matters relating to the manner in which the [provincial] Department of Welfare is run and the prince’s role in the province’s finances. There has been an ambiguous relationship with CPS for some time now.”
Padarath says the Black Sash has been probing the relationship between CPS and the welfare department for some time. “The relationship between CPS and Cornerstone seems to be linked with their relationship to Gideon Zulu. It is odd Cornerstone have an exclusive contract with CPS to supply funeral policies,” she said.
A Durban High Court judge told the M&G CPS’s practice of deducting Cornerstone’s money directly from policyholders’ pensions appears to constitute a violation of the 1992 Social Assistance Act of 1992, which outlaws any deduction from a pensioner’s account.
Last week Zulu’s daughter, Dr Cynthia Kabanyane, defended the CPS payments into her account on the grounds that she had carried out a “microlending” study for the company.
Commenting on last week’s article, the head of CPS, Serge Belamont, told the M&G his company does not “get involved in graft and corruption. We hired the prince’s daughter to do a study for us as we felt she was the best person. With her connections and ability to speak the language it would be far easier for her to interview folks in the rural areas than any big marketing company.”
It emerged this week that CPS won its pension distribution tender because of the insistence of the KwaZulu-Natal welfare department. Eric Mhlongo, the director of the department, confirmed this to the M&G, saying he had insisted CPS get the contract, but that everything was above board.
“We did not want pensioners to have to register again with a new company. If we keep CPS then the pensioners are spared the difficulty of having to register again. We are simply putting our old folk first.”
When the M&G phoned the office of Prince Gideon Zulu for comment it was explained that the prince would not under any circumstances talk to the M&G, and the switchboard operator said the prince was planning on taking criminal action against the M&G for publishing confidential bank account details.
The Black Sash has asked the Heath special investigative unit to investigate.
n A man purporting to be Myeni claimed on Thursday Myeni had not spoken to the M&G and that Myeni had no links to Cornerstone. However, the Black Sash confirmed it had documents proving Myeni headed Cornerstone.