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EXCLUSIVE: VBS loan, dubious financials could leave Samwu under administration

This follows several damning discoveries made by the Labour Registrar of large scale financial irregularities, including a questionable loan amounting to R12 million Samwu received from VBS mutual bank.

samwu-unionjpg

JOHANNESBURG – South Africa’s biggest municipal trade union the South African Municipal Workers’ Union (Samwu) could be placed under administration soon.

This follows several damning discoveries made by the Labour Registrar Advocate Lehlohonolo Molefe of large scale financial irregularities, including a questionable loan amounting to R12 million Samwu received from the now-defunct VBS Mutual Bank.

According to Molefe, the loan has not been repaid, although Samwu general-secretary Simon Mathe has denied this.

“There appears a payment purported as a loan from the now discredited, dysfunctional and what has been referred to as ‘the heist bank’ – VBS bank of R11,8 million. The first repayment of R5 million which was expected to be repaid on 31 November 2017 was not paid.

“This is not surprising because the current liabilities as reflected on the financial statement exceed the assets by R29.4 million,” Molefe said.

Samwu has led a protest campaign across the country since the VBS scandal broke out, demanding that officials at implicated municipalities be dismissed.

The union has been dogged by scandal over the misappropriation of union funds for several years, with some of its leaders arrested over missing funds which amount to R136 million.

Clashes among its current and former leaders over the control of the union have also seen its membership dwindle over the years, with disgruntled members opting to form splinter unions.

The registrar, who is empowered by the Labour Relations Act (LRA) to apply to the Labour Court for the union to be placed under administration in line with his duty to monitor the functioning of all unions, said there was a “strong case to be made against the union”.

Among his findings were the following:

• There are no supporting documents for the amount of R4.8 million allocated for operational expenses in 2017.

• A commission received of R18,499,357.00 in 2017 is not explained.

• Adverse (audit) opinion which included some provinces not being audited, irregularities regarding building contracts, furniture and computer equipment, inadequate accounting records keeping as provided in terms of section 99 of the LRA.

Samwu said it has prepared a formidable case against the Labour Registrar’s intention to place it under administration, describing Molefe’s decision as “politicking”.

Mathe complained that they were not afforded an opportunity to explain some of the irregularities that appear in its audited statements.

This is despite the registrar telling Eyewitness News that Samwu had written to his office in an attempt to explain its non-compliance.

Mathe said the issues raised were concluded two years ago.

"He is not privy to the facts that he raised… He is just politicking and he is new, these matters were addressed with the previous registrar. We made representations and he was content that the matters had been dealt with in 2017," he said.

(Edited by Thapelo Lekabe)

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