Zwelinzima Vavi's detractors in the Congress of South African Trade Unions (Cosatu) have latched on to an apparent financial scandal surrounding its investment company, Kopano Ke Matla, to make a new case for their dissatisfaction with his leadership.
In the latest development, the Mail & Guardian has learned that some of the leaders of the trade union federation are pushing for action to be taken against the Cosatu general secretary for allegedly covering up a damning report by the Financial Services Board (FSB), which uncovered apparent cases of corruption, fraud and money laundering involving Kopano ke Matla and Westside Financial Services.
Two people with detailed insight into the report confirmed that it alleged that Kopano ke Matla – which means unity is power – conducted financial advisory services without approval in terms of the Financial Advisory and Intermediary Services Act.
Both of these people said the report recommended that criminal charges be brought against senior Kopano ke Matla staff members. It also stripped Kopano ke Matla of its licence to manage pension funds for workers. Kopano ke Matla CEO Collin Matjila is named in the report as contributing to the investment company's woes.
The loss of the licence has cost Kopano ke Matla a R700-million Bosele National Provident Fund account. FSB spokesperson Tembisa Marele declined to confirm that criminal charges had been recommended. "What I can say, is that the FSB did conduct an investigation, which was presented to Kopano."
The FSB is by law prohibited from discussing such investigations.
Financial impropriety
Kopano ke Matla is also embroiled in a fight within Cosatu over the selling of its old headquarters and the purchase of a new building. It managed the deals, which are now the subject of an independent investigation by the auditors SizweNtsalubaGobodo.
Asked about his relationship with Vavi and whether he took full responsibility for the financial crisis in Kopano, Matjila said: "Please refer to the Cosatu secretariat report to the Cosatu 11th national congress held in September 2012 at Gallagher Estates. Book four page 49 has the Kopano report. You can access this from the Cosatu website."
The M&G could not find the report.
Some Cosatu leaders have accused Vavi of financial impropriety in both transactions.
Those who spoke on condition of anonymity this week claim Vavi knew about the FSB report – completed in 2011 – but he choose not to share it with other Cosatu leaders because he wanted to protect Matjila, whom they allege is a close ally of Vavi. The anti-Vavi faction also claims that he failed to intervene in a dispute involving Matjila, Kopano ke Matla and Westside director Lesley Kgomo, who complained to Vavi about Matjila's refusal to pay Kgomo R15-million for the services he provided to Kopano.
The matter, according to Cosatu insiders, was only settled after Kgomo approached Cosatu president Sdumo Dlamini, who, in turn, instructed Kopano chairperson Prabir Badal to intervene. Badal, who is also national treasurer of the National Education Health and Allied Workers' Union, is said to be close to Dlamini.
Moral responsibility
Union and Kopano ke Matla officials said that Dlamini, who has been accused by Vavi's supporters of driving the campaign to remove Vavi from office, has approached several people within the federation to provide him with more information about Vavi's relationship with Matjila and Kopano.
Both Vavi and Dlamini refused to comment this week, citing Cosatu's internal processes. Dlamini said: "I will always respect the Cosatu internal process and therefore won't comment on any matter relating to such in public. Sorry."
Vavi said: "All leaders have been given [the] opportunity to make presentations including whatever evidence of any wrongdoing to the facilitators appointed by the CEC [central executive committee]. I will engage with whatever through that process."
Badal said: "I have strong ethical and moral [responsibility]. I will not get involved in any political assassination [of anyone]. Put all the questions to the CEO [Matjila] and see if he will find pleasure in answering them."
A Cosatu leader who is close to Dlamini accused Vavi of double standards when it came to fighting corruption. He said the report recommended the matter be reported to the Hawks for criminal investigation but Vavi did nothing about it.
"If this is done by someone who has presented himself as the champion of fighting corruption, then we should be very worried. It really raises questions.
"The upcoming CEC, which is in the second week of July, must be given a full report regarding the cancellation of the licence.
"He [Vavi] is wrong for not sharing the report with us. There is no way Vavi would not have been aware of the FSB report as he is close to Matjila. He was instructing Kopano ke Matla what to do during the selling of the old building and the purchase of the new building," the leader said.
ANC leaders are concerned that the deepening divisions in Cosatu will have a significant impact on the party's election campaign if they are not resolved soon.
ANC secretary general Gwede Mantashe and ANC deputy president Cyril Ramaphosa have met leaders of Cosatu affiliates individually to try to resolve the infighting. But some of the leaders believe the ANC's intervention has come too late and the damage has been done.
Factions prepare for battle at Nehawu congress
Supporters of Cosatu president Sdumo Dlamini and those supporting the federation's general secretary, Zwelinzima Vavi, are set to clash at the National Education, Health and Allied Workers' Union (Nehawu) congress next week, with both sides battling for control of the union.
The Mail & Guardian understands that Vavi supporters in Nehawu, led by those from the Eastern Cape, are planning to push for a resolution that will force Nehawu national office bearers to resign their full-time positions if they are elected leaders of other alliance structures, such as the ANC and South African Communist Party (SACP).
Many in the union believe the proposed resolution is targeting Nehawu general secretary Fikile Majola, who was elected as an ANC national executive committee member in December. He also serves as a central committee member of the SACP.
On the other hand, Dlamini supporters are planning to oust Nehawu deputy general secretary Suraya Jawoodeen, who is seen as "ultra-left" and an ally of Vavi and Irvin Jim, general secretary of the National Union of Metalworkers of South Africa.
Nehawu's Free State secretary, Bareng Soke, is seen as a possible replacement for Jawoodeen and ultimately would take over from Majola, who could step down if he is offered a ministerial position by President Jacob Zuma after next year's general elections.
Soke is also Free State secretary of the SACP.
Majola and Dlamini fear that, if Jawoodeen takes over as Nehawu general secretary she is likely to put the union on a collision cause with the ANC because of her policy views.
But several attempts by Majola's supporters to get rid of Jawoodeen in the past have been unsuccessful, according to Nehawu insiders.
"All the leaders and officials at head office treated her with disrespect. She is actually lucky to have made it to the next congress. All deputy general secretaries were kicked out before they finished their terms in the past years because they clashed with Majola. They wanted to suspend Jawoodeen before, claiming she was dividing Nehawu Western Cape but this did not work," a Nehawu source said.
The anti-Majola faction, which is in the minority, is also planning to take the fight to Majola.
The group will raise concerns about Nehawu's continued funding of the SACP and its leaders, despite the fact that the union is battling to repair its own building.
"We want to know why Nehawu leaders continue to donate millions of rands into the SACP's coffers while our building is collapsing. We have been sponsoring SACP meetings in luxury hotels, we pay rental cars, flights, accommodation, printing and cellphone bills for SACP leaders and officials," said another senior Nehawu leader.
The anti-Majola faction will also raise concerns about the poor service provided by union leaders to ordinary members and about the union's failure to consult ordinary members about its position on Vavi.
Meanwhile, Vavi's supporters have described Nehawu's decision to invite Zingiswa Losi, an ally of Dlamini, to address next week's national congress as a snub to Vavi.
"It is clear that they [Nehawu's top six leaders] did not want Vavi to speak because they did not want him to take the limelight at the conference because they know he is loved by ordinary workers," said a senior Cosatu leader.