pension scheme
Paul Kirk
The daughter of Prince Gideon Zulu, the KwaZulu-Natal minister of welfare, is a consultant to Cornerstone, the company that has been accused of selling dubious funeral policies to pensioners across the province.
The revelation that Zulu’s daughter, Dr Cynthia Kabanyane, is employed by Cornerstone is the latest in a series of examples of Zulu’s extra-curricular involvement in private companies linked to KwaZulu-Natal’s welfare system.
The Mail & Guardian reported last week that Cornerstone – which was set up by a close friend of Zulu’s – has been selling its policies at state pension pay stations operated by another private company, Cash Paymaster Services (CPS). With the help of CPS, Cornerstone deducts its R10 to R40 contributions directly from pensioners’ state pay-outs – and then gets them to sign forms which do not even allow pensioners to name the beneficiaries of their funeral policies.
The M&G earlier reported that CPS has been paying sums of money into an account in the name of Zulu’s daughter, Kabanyane, which are shortly afterwards transferred into Zulu’s personal account. CPS says the money was paid to Kanyane for a research project into money lending.
The Black Sash Trust had fielded dozens of complaints from old age pensioners about Cornerstone’s funeral policies. A representative of the trust, Ashnie Padarath, told the M&G she had dealt with a number of cases where the elderly were either not aware of what they were signing or were led to believe that if they did not take out the policy they would not get their pensions.
Padarath told the M&G this week that two years ago Geraldine Fraser-Moloketi – the then minister of welfare – vowed to put a stop to the sale of Cornerstone policies and the deductions being illegally made from pensions to service the policies.
The company this week told the M&G it did not employ Kabanyane.
However, posing as an accounts clerk from a large clothing company, the M&G obtained confirmation – on a tape recording – that Kabanyane is employed by Cornerstone as a consultant.
Attempts by the M&G to obtain comment from Cornerstone management were fruitless. The M&G was told that all the company directors were in a meeting and nobody else could comment on the situation.
As a result of the ongoing publicity given to corruption in his ministry, Zulu has vowed to sue his bankers – First National Bank – for allowing documentation showing deposits from CPS to his daughter, and thence to himself, to slip into the public domain.
Attempts by the M&G to obtain comment from Zulu failed as switchboard operators told the M&G they had strict instructions not to allow calls from the M&G through to Zulu.
Neither the M&G nor First National Bank had been served legal papers by Wednesday afternoon – despite promises by Zulu to do so when he was interviewed on Durban’s East Coast Radio.
While Lionel Mtshali, the KwaZulu-Natal premier, was unavailable for comment, impeccable sources in his office have confirmed that a full investigation of the province’s embattled minister of welfare is on the cards.
The sources told the M&G that MEC for Finance Peter Miller will be meeting with Judge Willem Heath of the Heath special investigating unit ”as soon as humanly possible” to discuss the pension delivery tender and a possible investigation into the matter.
Eric Mhlongo, the head of the Department of Social Welfare has confirmed to the M&G that the department had steamrollered CPS’s receipt of the contract in November 1999.
Mhlongo claimed he had insisted upon this so as not to inconvenience pensioners who were used to dealing with CPS.
Absa – the rival bidders to CPS – were around R20-million cheaper, but still lost to CPS. Their rival pension pay-out system is used in the Free State where it has cut fraud related to pensions to almost nil.
Warwick Dorning, the representative for Miller, told the M&G that the tender process in the province would be under review in the near future. He told the M&G that, while the overhaul was not as a result of the M&G’s revelations, the move would cut out corrupt practices.
Zulu was supposed to meet Judge Heath this week to discuss fraud in his department. Zulu inexplicably cancelled the appointment – which had been scheduled for months – at the last minute, the M&G confirmed this week.
l The Black Sash confirmed last week that Cornerstone was headed by Musa Myeni, a long-time friend of Zulu’s and a former senior member of the Inkatha Freedom Party. Myeni has now denied he spoke to – and swore at – the M&G last week. He has also denied any link to Cornerstone, and threatened to sue the newspaper.