The inquiry into Canyon Springs Investments 12
The former owner of asset managers Trilinear Capital, Sam Buthelezi, is trying to keep the media out of next week’s insolvency hearing into Canyon Springs Investments 12, which is unravelling the mystery of why R100-million of clothing factory workers’ provident funds went up in smoke.
Legal representatives for the Mail & Guardian and Media 24 were in the high court on Friday to fight the move in order to protect the public’s right to know what happened to the money. While the insolvency inquiry is a closed affair, a few reporters have been granted permission to attend and report on the inquiry on the basis of a high court order. As a result, witnesses who have testified before this inquiry have had the media present.
Once hailed as a whizz asset manager, Buthelezi mysteriously invested the pension funds in Canyon Springs, which was co-owned by former Deputy Minister of Economic Development Enoch Godongwana and his wife Thandiwe. Buthelezi and former unionist Richard Kawie have been arrested on charges of fraud relating to the missing pension money, and released on bail.
The legal rumpus began after the South African Clothing and Textile Workers’ Union (Sactwu) brought a court application directing Buthelezi to submit himself at the inquiry on May 15. If he had failed to comply, he would be have been placed in contempt of court. In response, Buthelezi launched counter-applications.
In his affidavit to the court, Buthelezi said some of his evidence might be incriminating, and as a result of the media’s coverage of his testimony, he would face a “public trial”. He argued that in terms of a section of the new Companies Act, any incriminating information obtained during the inquiry could not be admissible as evidence against him during criminal proceedings in a court of law. Yet if he appeared at the hearing, his examination would be made public.
‘Clutching at straws’
Buthelezi was not present when teams of lawyers heard the matter before Western Cape high court judge Bennie Griesel.
Advocate Tracey Dicker SC, representing the M&G, told Griesel that the M&G only had an interest in respect of the counter-application filed by Buthelezi involving the media attendance at the inquiry. Buthelezi is also challenging his constitutional rights in respect of the inquiry and lodged his papers at short notice last week.
“It is really only in respect of the one counter application that we are joined,” Dicker told Griesel. “It is very confusing, and really rather a mess.”
Dicker said that Buthelezi seemed to be “clutching at straws” in his applications before court.
Following consultations between all the legal representatives, and after listening to their input, Griesel made the order that Buthelezi should submit himself for examination next week, and any other time it was considered necessary.
If Buthelezi did not comply, he would be declared in contempt of court, and committed to imprisonment for a period of 90 days, he ruled.
Media barred
The media companies, however, were ordered not to report on his evidence, until there has been a final determination of any application brought by Buthelezi to bar reporters from either attending the hearing when he gives evidence or reporting on his evidence. The media were also ordered not to report on his evidence until there has been an outcome on his constitutional challenge to sections 417 and 418 of the Companies act, which guide insolvency inquiries.
The inquiry commissioner now has the power to consider the matter of whether the media is allowed to attend next week. Dicker will be at the inquiry to decide whether to challenge the commissioner’s decision in court if the media is barred from attending the proceedings.
Given only two weeks by the judge to file court applications after the inquiry commissioner has made a decision, Buthelezi has been ordered to file his papers “on a semi-urgent basis”.
Since the inquiry started last year, Buthelezi has had three sets of legal representatives and has gone to court on three occasions to try to prevent him from having to give evidence to the inquiry.
Prison hearing
In November last year, he was subpoenaed to appear at the inquiry but failed to arrive. Buthelezi could also not be persuaded by the probe’s legal team to give evidence at a special hearing set up for him in the high-security Pollsmoor Prison in January this year. Instead, he told the inquiry lawyers who were convened in a conference room at Pollsmoor with both the M&G and Media 24 in attendance, that he was exercising his “constitutional rights” by not co-operating, as his legal representative was not present.
Buthelezi is key to unravelling why the millions in provident funds belonging to thousands of poor factory workers was diverted to Canyon Springs.
Godongwana resigned from his top government post after appearing twice before the inquiry, amid talk that there was growing “outrage” in government circles.
Buthelezi has previously claimed, through his lawyer at the time, that Godongwana was involved in procuring the loan at the start. Godongwana denied the allegation in an interview with the M&G, saying the funds were already in place when he took up a job at Canyon Springs.