[DEBATE] : COSATU response to the Financial Mail
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Fri Mar 2 16:44:51 GMT 2007
COSATU Media Release, 01-Mar-2007 14:41
COSATUs response to the Financial Mail
In response to an article in the Financial Mail on 2 March 2007, How was
Cosatu paid out? the Congress of South African Trade Unions has the
Firstly COSATUs views on the Fidentia scandal are summarised in todays
statement following this weeks meeting of its Central Executive Committee:
The CEC expressed deep shock at the potential loss of millions of rands in
funds for the widows and orphans of mine workers and other workers from
other sectors of our economy. We discover every day that more and more of
our union members hard earned wages may have fallen victim of this shameful
scam. So far SAMWU, FAWU and SATAWU reported that some of their funds were
invested in Fidentia. They urged the curators to complete their
investigations as soon as possible and recover as much money for the
beneficiaries as possible.
Trustees, both for the employers and workers, must take full responsibility
for investing workers hard-earned savings in what seem to have been a
fly-by-night and unregistered company. Should any of the trustees be found
to have inappropriately colluded with Fidentia to cause this pain, we shall
call for the harshest penalties possible, irrespective of who they are,
including even if they are union members or leaders.
The Fidentia scam highlights the correctness of the long-standing call by
COSATU that no effort must be spared to train and empower trustees so that
they fully comprehend both their fiduciary and political responsibility to
members of the retirement funds they are administering. The mentality of
leaving things to the experts has been very costly.
We agree fully with the sentiments by the Minister of Finance in this
regard and pledge to work with him and all other relevant institutions
including Nedlac to ensure that trustees, in particular those representing
members are trained and capacitated. We shall convene a meeting with the
Minister and the Financial Services Board to look at ways of ensuring that
this scandal never happens in future and ways of alleviating the impact this
scandal may have on the workers and their dependents.
COSATUs relationship with its investment arm, Kopano ke Matla (KKM), is
that they are autonomous bodies. The COSATU leadership does not, and cannot
be expected to, keep a day-to-day record of the transactions of its
investment arm or involve itself in every investment decision. Even if we
had known about the deal involving Software Futures, there would have been
no way of COSATU knowing at the time what was wrong with Fidentia.
The article is therefore wrong to suggest that Cosatu was involved in the
dealings it was KKM.
As soon as we heard of the allegations, COSATU asked for a comment from KKM
s CEO, Collin Matjila, who informed us that:
"KKM entered into a business transaction with Fidentia, through a company
called Kopano Africa Investments, for the acquisition of Software Futures,
an IT company. KKM held 49% of the shareholding in Kopano Africa
"There was no upfront financial consideration, but instead a sweat equity
contribution was agreed to. Therefore, we did not put in an amount of R10m
nor was there any agreement for us to put such. It was agreed that KKM would
participate actively in growing the business of Software Futures.
"As a result, C Matjila, was appointed chairperson and N de Lange was
deployed as an executive in Software Futures. N de Lange has vast IT
experience. having worked in an IT environment before.
"As indicated above KKM contributed towards the turn around of Software
Futures by growing its market penetration.
"Due to certain differences in management style with Fidentia, KKM decided
to exit Software Futures for value created over the three-year period. This
was reached after an out-of-court settlement.
"KKM was therefore never "given" any money by Fidentia "that was looted from
widows and orphans".
"At all times KKM conducted its relationship with Fidentia in an open and
transparent manner and at no stage did KKM have any involvement in trust
funds administered by other entities of Fidentia. Its business was confined
to Software Futures, a software solutions company."
COSATU received absolutely nothing from these transactions. The matter is to
be discussed further between the federation and its investment arm, and
should there be any evidence of illegal or improper practice, COSATU will
demand justice for those convicted.
Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets
Tel: +27 11 339-4911/24
Fax: +27 11 339-5080/6940/ 086 603 9667
E-Mail: patrick at cosatu.org.za
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