Liquidation inquiry on trail of missing money

The liquidation inquiry investigating the misappropriation of R100-million of clothing workers’ pension funds, has led to the arrest on Friday of two suspects, union consultant Richard Kawie and Trilinear asset manager director, Sam Buthelezi.

Both men tried to avoid appearing at the Canyon Springs Investments 12 inquiry in Cape Town by lodging court applications. After 50-year-old Kawie ran out of legal options, he eventually appeared before the inquiry last week, warmly greeting members of the South African Clothing and Textile Workers’ Union (Sactwu). The Mail & Guardian is unable to report on his evidence as he could be recalled to the inquiry.

The 42-year-old Buthelezi, who ran a black economic empowerment company that was hailed as a forerunner in the asset management field, has still not submitted himself to the inquiry.

The scandal is unravelling at rapid speed, as the inquiry’s team of forensic attorneys headed by Eversheds and Xulu Liversage has subpoenaed the company and personal bank records of both Kawie and Buthelezi, which allegedly reveal a spending spree of provident money belonging to poor workers.

The missing R100-million was loaned to Canyon Springs, a company 50% owned by the Deputy Minister of Economic Development, Enoch Godongwana, and his wife Thandiwe, who have both given evidence to the inquiry. The couple could still be recalled to give evidence when the inquiry reopens in January. Godongwana has told the M&G he did not know where the money had come from as it was already in place when he joined the company.

Patel expected at inquiry
The Minister of Economic Development, Ebrahim Patel, was also subpoenaed to appear at the inquiry, but it is still unclear when or if he will appear before it. Patel was general secretary of Sactwu at the time the investments were made. The minister earlier told the M&G he knows nothing about the movements of the provident funds, which were managed by trustees and were not his responsibility.

Meanwhile, suspended deputy general secretary of Sactwu, Wayne Van Der Rheede, is still not back at work as investigations continue.

Andre Kriel, general secretary of Sactwu, said he was happy the police were taking action and making arrests. “We will not leave any stones unturned to get to the bottom of this, as we try to recover our members’ retirement funds,” said Kriel.
The union is funding the inquiry in an attempt to solve the mystery of why the provident funds were used for risky loans and investments. A further R250-million of provident fund money belonging to clothing workers was used to buy shares in luxury property development company, Pinnacle Point, which has now been provisionally liquidated. The Pinnacle Point inquiry will begin next year.

Late Friday, the Hawks swooped on the two suspects, who will now appear in court on Monday. A police statement states that investigators are in possession of “sensitive documents” that will be used in the case against Kawie, as the state will try to prove that he committed tax-related fraud to the tune of around R942 000. Kawie is being accused of fraud involving R7-million, police said.

Buthelezi, who is the sole director of the now closed Trilinear, is being accused by police of allegedly “siphoning large amounts of cash” from the investment vehicle, Trilinear Empowerment Trust, into his personal account. Police said the allegations against him amount to theft from the trust, and its assets, involving R15-million.

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