The liquidation inquiry into Canyon Springs, which borrowed and never repaid more than R100-million of clothing factory worker’s pension money, was mired in further controversy this week when a call was made for Economic Development Minister Ebrahim Patel and a suspended union official to be subpoenaed to give evidence.
Xulu Liversage attorney Barnabas Xulu, who represents the trustees of the investment vehicle, Trilinear Empowerment Trust, told the Mail & Guardian that, as Patel had been general secretary of the South African Clothing and Textile Workers’ Union (Sactwu) when the provident funds were moved to Canyon Springs, he should have been subpoenaed to appear at the Âliquidation hearing in Cape Town, which is closed to the media and public.
Xulu claimed that “a conflict” had developed after Sactwu stepped in with funds to hold the inquiry and because its lawyers were now running the hearing.
“The union is highly implicated in the matter. I don’t see how the inquiry can be independent if its lawyers are running it and deciding who is to be subpoenaed,” said Xulu.
“I would like to see Ebrahim Patel subpoenaed to tell us what he knows, as well as former Sactwu deputy general secretary Wayne van der Rheede, who has been suspended.”
Van der Rheede could not be reached for comment, but Patel said he had not been advised that he should appear at the inquiry.
Patel said that the retirement funds were run by a board of trustees comprising employer and employee representatives, who had a fiduciary responsibility to protect the interests of their members.
“Neither the past nor present general secretary of Sactwu sits on the boards of the provident funds, nor are they consulted about or advised of the decisions of trustees on matters such as loans or specific investments,” said Patel.
“Accordingly, I have no knowledge of the decisions involving Canyon Springs or the status of Trilinear Empowerment Trust.”
‘Very surprised’
Tony Canny, director of Eversheds attorneys, said he was “very surprised” at the attitude of Xulu. “Initially he, representing the trustees of the Trilinear Empowerment Trust, was dealing with the inquiry. However, when he discovered that there weren’t any funds to pay the costs relating to the inquiry, he aborted it,” said Canny.
“Sactwu then instructed me to take the requisite steps to proceed with the inquiry, which is what I have done.”
Canny said that Sactwu would have “no objection” to Xulu subpoenaing anyone, including Van der Rheede and Patel.
He added that he had not been aware that Patel was general secretary of Sactwu at the time Canyon Springs borrowed the money.
Patel’s deputy minister, Enoch Godongwana, whose family trust owns 50% of Canyon Springs, was subpoenaed to appear before the inquiry and arrived early for the hearing.
Godongwana has insisted he did not know the money that his company borrowed was from clothing workers’ provident funds.
Asked if he wanted to comment before he went into the hearing, a seemingly unruffled Godongwana said: “Not now, thank you.”
His glamorous wife, Thandiwe, was also subpoenaed to appear. She was heard muttering as she walked into the boardroom: “I did not want to be part of this.”
Although Xulu applied for the provisional liquidation of Canyon Springs, he said he had believed there were sufficient funds left in the Trilinear Empowerment Trust to stage the hearing. The inquiry had to be called off in August due to a lack of funds.
Xulu said that Sactwu had not agreed to pay his costs and that the Trilinear Empowerment Trust trustees had dipped into their own pockets to ensure they were represented at the inquiry.
Costs
The M&G has learnt that Sactwu will be paying the fees and disbursements of the commissioner, attorney Jan Reitz, the venue costs, the transcription services, its own legal fees, and all costs incurred in relation to witnesses subpoenaed by Canny.
Canny said he believed Sactwu might have to fork out up to R1-million in costs.
If Xulu decides to subpoena Patel and Van der Rheede, he will probably have to pay the costs himself, as the trust has no money.
Another key figure who has been subpoenaed to give evidence is Richard Kawie, a former Sactwu consultant who is believed to have given advice on pension funds.
Kawie’s lawyers have agreed that he will appear before the inquiry, which runs on specified days until October 17.
Canny, who is conducting the forensic investigation for Sactwu, previously expressed fears that Kawie may have left the country, and the M&G‘s attempts to contact him were unsuccessful.
Kawie is alleged to have received about R8-million through investments in Canyon Springs, as well as a salary as a director of the company.
Also prominent on the list of witnesses who will testify is Mohan Patel, a director of Canyon Springs until he resigned when the scandal broke. Patel and Kawie’s family trusts own the other 50% of Canyon Springs.
Ebrahim Patel said that Sactwu had also launched a forensic investigation into the apparent disappearance of the pension money, and was preparing a dossier that would be available for the civil recovery of money as well as providing possible grounds for criminal charges.
“I hope that the relevant authorities send out a strong message that the plundering of ordinary workers’ savings, if this is shown to be the case, will not be tolerated and will be punishable,” said Patel.
Meanwhile, Webber Wentzel attorney Pam Stein has confirmed that Independent Newspapers will apply to the High Court in Cape Town on Friday for permission for its newsÂpapers to attend the inquiry.