Cosatu admits it didn't manage workers' pension properly
The admission comes after revelations of fund mismanagement and alleged money laundering.
JOHANNESBURG - The Congress of South African Trade Unions (Cosatu) has admitted the management of workers' money through its Kopano Ke Matla investment arm was not done with good governance and cost millions of rands, posing a risk to its financial credibility with members.
A 2013 financial services board report revealed, R123 million of workers' pension money was paid to its Kopano employee benefits company despite it not having any capacity to invest or manage it.
Cosatu's Kopano employee benefit fund had its operating license revoked by the Financial Services Board last year after its directors were implicated in alleged money laundering and irregular payments of up to R50 million.
The FSB report also questions why the payments were made from the investment arm to the benefit fund and why the directors were paid up to R50 million despite doing almost no work.
Cosatu deputy general secretary Bheki Ntshalintshali says the transfer of 4,000 workers' pension money to the federation's employee benefit fund was wrong and indefensible.
"The manner in which they secure the servicing of that provident fund of workers from the former Debtswana and the latitude they have with spending and the disappearing of money; nobody can defend that."
The National Union of Mineworkers (NUM) says it creates doubt among its affiliates, with Frans Baleni saying they would think twice before investing in the future.
"Where there is no good governance, there's no way we can channel finances to an institution with a doubtful reputation."
The FSB recommended criminal charges against the Kopano employee benefit fund trustees, but this has not happened yet.
The NUM says it is also aware of a campaign to drain the federation's finance through court action.
"We are seeing the Americanisation of the labour movement where unions with a big purse can actually buy other unions and drain Cosatu financially so that it can collapse."
Ntshalintshali says the disunity in Cosatu and action needed to fix this will come at a heavy price.
"While we know we are going to overcome it, I think we are going to pay dearly in the next few months in trying to build unity in the federation."