Standard Bank ordered to pay R528m fine
Standard Bank has been ordered R528 million to a union pension fund after it acted improperly.
JOHANNESBURG - Standard Bank has been ordered to pay R528 million rand to a union pension fund after a court ruled this month that it had dealt in the fund's shares improperly.
Trustees of a pension fund belonging to the South African Commercial, Catering and Allied Workers Union (SACCAWU) lent Standard Bank shares worth nearly R160 million in 2002 for five years.
The bank repaid the pension fund in 2007 and also handed over guaranteed returns agreed in its contract.
However, a court invalidated the deal this month, saying the initial loan of the shares should never have happened.
In its ruling, the court said Standard Bank should surrender nearly 3 million shares in mobile phone group MTN and 72,595 in media giant Naspers - some R528 million based on Thursday's prices.
It also has to hand over more stock in ElementOne and Avusa, which have since been delisted and are therefore difficult to price.
"Had the pension fund just kept the shares and not lent them to Standard Bank to utilise and take the benefits and dividend and growth, the pension fund would have been better off to the extent of anything between 500 and 700 million," pension fund curator Tony Mostert said.
The bank has 14 days to appeal the court's December 3 decision and said it was awaiting legal advice.
"The arbitrator has made an award on some of the issues and has yet to hear evidence and/or argument on the balance," it said in a statement. "As the arbitration is a private process and ongoing we prefer not to say more about it at this stage."
The court appointed Mostert custodian of the pension fund's shares in September 2002 in place of the trustees.