Minister clamps down on Sector Education and Training Authorities after Fidentia collapse

WARY: Labour Minister Mdladlana said the department is taking measures to prevent the transport Seta fiasco in other Seatas. Pic. Marianne Pretorius. 30/01/2007. © ST.
WARY: Labour Minister Mdladlana said the department is taking measures to prevent the transport Seta fiasco in other Seatas. Pic. Marianne Pretorius. 30/01/2007. © ST.

The spectacular collapse of Fidentia has prompted Labour Minister Membathisi Mdladlana to crack the whip on the Sector Education and Training Authorities' (Setas) financial activities.

The spectacular collapse of Fidentia has prompted Labour Minister Membathisi Mdladlana to crack the whip on the Sector Education and Training Authorities' (Setas) financial activities.

Setas will face severe scrutiny as government considers drastic measures to oversee their current investment arrangements.

Mdladlana yesterday released the results of a labour department audit on the investment of surplus funds by Setas.

The audit came in the wake of the transport Seta having invested more than R245million with Fidentia - whose boss J Arthur Brown and fellow director Graham Maddock appeared in the Cape Town Magistrate's Court yesterday on charges of fraud and theft involving more than R200 million. The two were denied bail and will appear in court again on March 15 for a bail application.

Mdladlana said the likelihood of loss of an estimated R245million of skills development funds and pension funds through the Fidentia investment "that went wrong" was regrettable.

"I am following up developments in this regard very carefully. We are also taking measures to prevent similar occurrences in other Setas," he said.

Labour department officials were already working with the National Treasury to determine whether there was negligence or contravention of regulations, and the extent of compliance with policy.

"We have been furnished with most of the records and correspondence between Teta and Fidentia. I am told that Teta is also conducting its own internal investigation to determine what could have gone wrong, including possible culprits who must be disciplined accordingly," Mdladlana said.

He said he shared President Thabo Mbeki's concerns about the levels of Seta funds being invested in the midst of the current skills shortages.

"Setas are not in the stock exchange business. Their role is to ensure that funds entrusted to them are used for purposes they were meant for," he said.

The National Skills Authority had been asked to revisit the levy grants to employers and to advise on the best ways to minimise the amount of cash in Seta accounts at any given time.

Labour officials had also been instructed to work closely with the auditor-general in questioning the Seta levels of commitment, how long some projects had been, and whether signed contracts existed against those commitments, Mdladlana said. - Sapa

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