MPF executives speak out on the alleged misappropriation of funds
The day of reckoning might have arrived for Fidentia fund managers as a Financial Services Board (FSB) investigation gets under way to probe the handling of the Mineworkers Provident Fund (MPF), which provides support to orphans and widows of people killed in mining accidents.
The Congress of South African Trade Unions (Cosatu) released a statement yesterday calling on the public not to invest their money with the Fidentia Group, which is currently under legal curatorship after allegations of the misappropriation of just less than R700million of shareholders' funds.
Former MPF principal executive officer Frans Mahlangu is waiting for the outcome of a hearing from the board of trustees of the fund, but for different reasons.
"They [the board of trustees] are charging me with protesting against the removal of Mrs [Collyn] Manzana," he said.
"They are also charging me with treating Lekana and Fidentia badly."
The fund administration company (Lekana) was the first to display signs of "trouble" said former MPF chairman and trustee Collyn Manzana.
"In 2002 members started to complain that they did not receive their regular payments, and it came to light that the systems at [newly created] Lekana were a mess."
Under the new structure, complaints started to come to Mahlangu's attention. He started enquiring about the fund's performance in 2004, but the first official investigations were only conducted in 2005.
"Except for Manzana, I had no support from the board. They agreed to present the case to Fidentia, but failed to get any explanation, instead Fidentia became more and more defensive," Mahlangu said.
"Manzana suggested that we terminate the relationship with Fidentia, but we were outvoted and a further meeting was called."
In June Manzana was fired after numerous failed attempts to find an explanation for the irregularities and audit firm KPMG was called in to investigate the matter in October.
The outcome of the investigation was that there was nothing "significantly wrong" with Fidentia's practice.
"In November the board turned on me and I was suspended," said Mahlangu.
Manzana said the main source of the the MPF's problems was that the trustees had a conflict of interest on several levels.
"Some of them have their own business interests. They have shareholdings in Lekana and other service providers such as Teba bank," she said.
"If there is problem with one of the service providers most, of the trustees will move to cover it up."