Union billions at heart of battle

Union officials are haggling over the management of a Ceppwawu investment company. (Halden Krog, Gallo)

Union officials are haggling over the management of a Ceppwawu investment company. (Halden Krog, Gallo)

R4-billion worth of investments – that appears to be at the centre of divisions and infighting in the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (Ceppwawu).

The Mail & Guardian reported recently on the department of labour’s bid in the Labour Court to appoint an administrator to oversee the union’s operation. The department says Ceppwawu, which is an affiliate of trade union federation Cosatu and has a total membership of 65 000, has failed to submit audited financial statements for more than three years.

In a new development this week, the union’s deputy general secretary, Chief Seatlholo, lodged a court bid to remove the union’s general secretary, Simon Mofokeng, as a director of Ceppwawu Investment and as a trustee of the Ceppwawu Development Trust.

The trust was established in 2001 to make investments for the empowerment and development of Ceppwawu members, their families and communities. Ceppwawu Investments is supposed to contribute 25% of its dividends to the union through the trust.
But Seatlholo claims the last time the investment company paid dividends to the union was in 2012 – an amount of R33-million that, he alleges, was never accounted for.

Mofokeng, in one of his secretariat reports, denied this claim.

In breach
Seatlholo also wants the court to declare invalid the appointment of Ceppwawu president Thamsanqa Mhlongo and second deputy president Eunice Dlodlo as trustees. He claims the appointment by the national office bearers was in breach of the union’s constitution.

“The appointment of the three officials was against the expressed resolution of the union’s national congress that the NOBs [office bearers] cannot be appointed as trustees or directors. The general secretary is fully aware of the resolution,” Seatlholo said in an interview this week.

He said Mofokeng could not be trusted to manage the affairs of investment company and trust because he was failing to manage the union members’ subscription fees.

Seatlholo said Mofokeng’s roles in the union, its investment company and development trust constituted a conflict of interests.

“As the general secretary and a trustee, he is using the information to his advantage. Since he was elected, his focus has been the investment company. The investment company has been a source of division within the union. Service to members is suffering because of the fights over the investment money,” Seatlholo said.

The value of Ceppwawu’s investments is estimated to be between R3.8-billion and R4-billion.

‘No official policy’
Mofokeng, in his responding affidavit, dismissed Seatlholo’s claim that the office bearers acted in breach of the constitution by appointing him and two other officials as trustees. “There is no official policy that national office bearers could not be appointed as trustees of the trust.”

He said there was a history of discord in the union over long-standing investments by the union’s investment arm and the repayment of money advanced by the Ceppwawu Pension Fund to Ceppwawu Investments.

“It is sad but perhaps inevitable that these disputes have spilled over into Ceppwawu and have created two factions within Ceppwawu,” Mofokeng said.

“The national office bearers, including Seatlholo, were elected to their positions on the basis that they intended to ensure that the trust and Ceppwawu Investment function purely for the benefit of the Ceppwawu members.”

He said Seatlholo changed his allegiances during 2012 and sided with a faction aligned to Isaac Shongwe, the owner of Letsema, a company contracted by Ceppwawu to manage the union’s affairs.

In 2013, Business Day reported that Shongwe laid charges against Mofokeng for alleged perjury and defeating the ends of justice. These related to a dispute between Letsema and a management agreement it had with the union. Shongwe, the newspaper reported, was going to make more than R225-million from the deal that Mofokeng was trying to have set aside.

Mofokeng argues in his responding affidavit that Seatlholo was trying to destabilise the trust for his own purposes and those of a faction aligned to Shongwe. “In particular, he seeks to destabilise the trust to prevent [it] from exercising shareholder control and oversight over the board of Ceppwawu Investments.”



Matuma Letsoalo is a senior politics reporter at the Mail & Guardian. He joined the newspaper in 2003, focussing on politics and labour, and collaborated with the M&G's centre for investigations, amaBhungane, from time to time.In 2011, Matuma won the South African Journalist of the Year Award and was also the winner in the investigative journalism category in the same year.In 2004, he won the CNN African Journalist of the Year prize – the MKO Abiola Print Journalism Award. Matuma was also a joint category winner of the Mondi Shanduka SA Story of the year Award in 2008. In 2013, he was a finalist for Wits University's Taco Kuiper Award. Read more from ML

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