Simon Mofokeng’s reign as the general secretary of Cosatu’s affiliated chemical workers’ union could come to an abrupt end if the department of labour’s bid in the Labour Court to appoint an administrator to oversee the union’s operations is successful.
The department, which regulates the affairs of all unions, says in court papers the union has failed to submit audited financial statements for several years and the department wants to put it under administration.
Mofokeng said the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (Ceppwawu) was still consulting its members before it could decide whether to oppose the labour department’s application.
“I will comment when we are ready. For now, there is no decision,” he said.
Mofokeng, who is also a businessperson, has been accused by fellow leaders in the union of running the organisation like a spaza shop. He is alleged to have benefiting financially from companies, such as Sasol, in which Ceppwawu organises workers.
The Mail & Guardian reported in 2010 that Mofokeng was under investigation for allegedly using his union position to negotiate a multimillion-rand deal for his wife’s company at Sasol.
The Sunday Times subsequently reported in August 2013 that Mofokeng and his wife, Maureen, were allegedly raking in at least R320 000 a month from a shady empowerment deal with Sasol valued at R60-million a year. The deal for coal handling was given to Kotso Batho, a company in which Maureen Mofokeng owns a 90% stake.
The newspaper reported that Sasol cancelled the deal after it emerged that the couple allegedly used fake documents to clinch contracts worth more than R300-million. Sasol said at the time it would open a fraud case against the two.
The labour department’s legal papers show that the union incurred losses amounting to R56.9-million between 2008 and 2012. A draft financial statement for the year-end December 31 2010, which the department included in its legal papers, shows that Ceppwawu had a deficit of R14.1-million. In 2009, it had a R3.9-million deficit, and an accumulated deficit of almost R21-million as of December 31 2010. According to the draft statement, the union could not pay its operational costs because of a lack of liquid funds.
Mofokeng has failed to convene national executive committee meetings, something that the department claims is a contributing factor to the union’s dire financial situation.
Ceppwawu owns an investment company, which is valued at R3.8-billion, but the department says the union has also failed to submit audited financial statements for it.
“The respondent [Ceppwawu] has an investment company – Ceppwawu Investment Company – but the financial statements of this company were never prepared and submitted to the registrar.”
According to Johan Crouse, the registrar for labour relations in the department of labour, “Effectively, a substantial portion of the respondent’s assets have been placed beyond the security of my office.”
The department blames infighting between factions in the union for paralysing the organisation to such an extent that it is incapable of complying with its obligations under the Labour Relations Act.
Crouse said the only reason the department did not deregister the union was because it would not be in the members’ interest.
“The audited financial statements of 2010 and 2011 were not submitted in September 2013 and to date have still not been submitted. Indeed, no audited financial statements have been submitted for the years ending 2010, 2011, 2012 or 2013, and it is expected that none will be submitted for the year-end 2014, when those fall due shortly.”
He says he was persuaded by members and some leaders not to deregister the union but to put it under administration.
The department’s acting director general, Thembinkosi Mkalipi, was also concerned that the deregistration of a union that size would have a negative effect on the sector in which it was involved and would leave its members helpless.
“It is clear that the respondent owns substantial amounts of money and other assets. There is the possibility that one or more of the respondent’s senior office bearers may be guilty of misappropriating its funds,” Crouse said.
He told the M&G that, by opting to put Ceppwawu under administration, the department had acted responsibly and in the interests of workers.
“We felt that if we opt to deregister the union, all the problems by leaders might not be uncovered. We want members to elect new leadership,” Crouse said.