Godongwana denies quitting over R100m pension scandal

Enoch Godongwana insists his resignation as deputy minister of economic development is due to his ANC commitments in the year ahead, and has nothing to do with the probe into the misappropriation of R100-million of clothing workers’ pension money.

The R100-million went up in smoke after it was sunk into Canyon Springs, a company—currently the subject of a liquidation inquiry—half-owned by a family trust belonging to Godongwana, and his wife Thandiwe.

The money belonged to more than 20 000 members of the South African Clothing and Textile Workers’ Union (Sactwu), who earn on average R700 a week and contribute 6.5% of their salary to the provident funds.

“People can have their own opinions about my resignation,” Godongwana told The Times newspaper, in a report published on Monday. “In my discussion with the ANC leadership and the presidency, I did not talk about my business interests ...
It was out of my own assessment that I decided to resign.”

He told the newspaper that he would be tied up with “party work this year”, but declined to elaborate on what this would involve.

Salary questions
In October last year, Godongwana told a closed liquidation inquiry in Cape Town that he had expected to earn an annual salary of R1.5-million when he chaired Canyon Springs, but had been paid only when the company had money.

The company’s books reveal that he received only R600 000 from Canyon Springs but, according to sources who attended the hearing, he said the company did not keep proper records.

From the records Canyon Springs did keep, it was apparently shown that Godongwana’s salary was drawn from the clothing workers’ pension money.

When it is finally established what he earned, Godongwana—who says the loan had been arranged before he and his wife came on board—could be forced to repay the money.

Godongwana’s wife Thandiwe, a director of Canyon Springs, is accused of borrowing as much as R93-million from the company which manages Sactwu’s provident funds, Trilinear Capital.

Arrests made
The liquidation inquiry has already led to the arrest in December of union consultant Richard Kawie and Trilinear asset manager director, Sam Buthelezi, who allegedly used money embezzled from the loan deal to finance lavish lifestyles. They could not raise the R500 000 bail imposed and spent Christmas in jail, although Kawie last week was released on bail after putting up properties in Goodwood, Cape Town and Noordhoek as guarantees.

Canyon Springs’s financial records show that vast sums of money were paid out to Kawie, as well as to the company’s former director, Mohan Patel.

The minister of economic development, Ebrahim Patel, who was general secretary of Sactwu at the time the investments were made, has told the M&G he knows nothing about the movements of the provident funds, which were managed by trustees and were not his responsibility.

Spokesperson Mac Maharaj said Godongwana had tendered his resignation in December, but President Zuma had asked him to stay on until the new year.

“The president has accepted the resignation and thanked the deputy minister for his dedicated service and duty to his portfolio and to the National Executive in general”, he said.

Godongwana is a member of the ANC’s Economic Transformation Committee. Godongwana is widely regarded in economics, with a Master of Science degree in financial economics from the University of London.

He is also a former deputy minister of public enterprises and continues to be a member of the ruling party’s Economic Transformation Committee.—Additional reporting by Sapa

  • Correction: In a previous version of this story we incorrectly stated that Canyon Springs’s financial records showed that vast sums of money had been paid out to the minister of economic development, Ebrahim Patel, who was then the general secretary of Sactwu. The funds were in fact paid to Mohan Patel, who was the director of the company at the time. We apologise for the error, which has now been corrected.

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