/ 20 May 2019

Dennis George ‘shocked’ in the wake of Fedusa sacking

Former Fedusa general secretary Dennis George.
Former Fedusa general secretary Dennis George. (Felix Dlangamandla/Beeld/Gallo)

Embattled former Federation of Unions of South Africa (Fedusa) general secretary Dennis George has responded to his recent dismissal from the trade union federation.

George, whose dismissal was announced by Fedusa last Friday, said in a statement on Monday that he is “shocked” at the “deliberate misrepresentation” of his position in facilitating the acquisition of shares in the controversial Ayo Technology Solutions.

“I have spent my entire life as a man of integrity, as someone who has fought for workers’ and employees’ rights. I have fought against corruption and I continue to do so,” he said.

The investment by the Public Investment Corporation (PIC) in Ayo — a company closely linked to Independent Media owner Iqbal Survé — has been scrutinised following revealing testimony at the judicial commission of inquiry into impropriety at the PIC.

The commission, chaired by retired Judge Lex Mpati, heard how former chief executive Dan Matjila ignored PIC processes and unilaterally signed the irrevocable subscription agreement which committed the PIC to investing R4.3-billion in Ayo when it listed on the JSE in 2017.

READ MORE: Fedusa secretary implicated in dodgy PIC deal suspended

In January, amaBhungane reported that Fedusa was sold Ayo shares for R1.50. In the deal, Fedusa bought over eight million shares in Ayo where the net value of each share went up to R12.47 following the PIC’s multibillion-rand cash injection.

A company called Difeme Investments also allegedly got three million Ayo shares at the same price as part of Ayo’s BEE pre-listing deal. George is the sole director of Difeme and a non-executive director of Ayo.

According to the amaBhungane report, this resulted in a R900 000 payout to George when Ayo declared its first dividend of 30c per share in November 2018. Ayo based the dividend payout on improved revenue in that year which would not have happened if the company did not have the billions from the PIC.

Last Friday, the Fedusa said in a statement: “During February 2019 the leadership of Fedusa took a decision to investigate allegations that Fedusa owned shares in Ayo Technology. External investigators had been appointed where after Dr George had been placed on suspension and a disciplinary process was initiated.”

According to the statement, at a meeting last Thursday the federation’s national executive council considered the recommendations made by an independent chairperson and “unanimously resolved to dismiss George based on findings of serious misconduct”.

On Monday, George reiterated that the motivation behind the acquisition of Ayo shares was pure.

Difeme was used as a nominee to warehouse Ayo shares until such time as Fedusa and its affiliates were certain about the direction of establishing investment companies, George said.

“My motivation was simply that these shares would assist Fedusa affiliates in building worker participation in the economy, that the affiliates would be financially strengthened and that workers would have representation on the board of the largest black ICT company in the country, Ayo,” he said.

“I reject with contempt the insinuation that I intended to benefit personally from these shares.”

George added that he is “proud to be a non-executive director of Ayo representing the interests of more than 2.5-million workers in South Africa today”. He said his appointment to the Ayo board was done with the full support of Fedusa.

In the wake of the allegations against George, Fedusa president Godfrey Selematsela said the federation was not aware of George’s personal involvement in Ayo and had learned about the matters after the reports in the media emerged.

Selematsela distanced Fedusa from reports that the union had also bought Ayo shares at a substantial discount. He said no authorising structure of Fedusa at any level had given a mandate for the purchase of any shares in a company.

The attempt to link Fedusa to Difeme Holdings, a company associated with George in his personal capacity, was incorrect as “the two entities have nothing to do with each other”, Selematsela said.

In his recent statement George said that it would be “sad” if “negative media, which is defamatory against Ayo” was to influence Fedusa affiliates not to take up shares “at the cost of workers”.“Like other trade unions, I hope that Fedusa and its affiliates will take up this generous offer by AYO since it is the workers who will benefit from the value of AYO shares and from the dividends that will be received,” George said, adding that if the unions choose not to take up the shares, he would consult with Ayo and recommend that the shares be made available to the workers directly.