- July 23, 2011
- Posted by: admin
- Category: Clothing and Textiles
JOHANNESBURG – The South African Clothing and Textile Workers Union (Sactwu) will transfer R200m worth of its stake in Hosken Consolidated Investments (JSE: HCI) towards retirement funds of over 20 000 clothing and textile workers affected by the Trilinear retirement fund saga.
“Sactwu will immediately inject R200m into the retirement funds of clothing and textile workers who are affected by the mishandling of their funds, by Trilinear,” Sactwu General Secretary Andre Kriel said.
“This decision was taken yesterday [Thursday], at the Sactwu National Executive Committee (NEC) meeting, currently being held in Durban. Kriel, will now urgently meet with the boards of trustees of the affected retirement funds, to progress the practicalities of the R200m injection.”
Sactwu has a 40% stake in HCI, whose business interests are in media, leisure and casinos.
Former unionist and now HCI Chairman Marcel Golding told Moneyweb he was aware of Sactwu’s pledge.
“It’s a pledge with the share they own in HCI, which is about 40%. The benefits of the shares will go to the retirement funds,” Golding said.
He added that Sactwu’s stake in HCI would be diluted, but not significantly. According to Golding, Sactwu’s stake in HCI is currently worth about R4bn. Five retirement funds in the clothing and textile industry will benefit from this capital injection. The five funds had put their monies in Cape based asset manager Trilinear. Some of the monies are allegedly missing or have been distressed after being funnelled to leisure and resort firm Pinnacle Point (R300m) and Canyon Springs, a company linked to Deputy Minister of Economic Development Enoch Godongwana and his wife.
Canyon Springs is said to owe Sactwu provident funds close to R100m including interest. Canyon Springs cannot pay the monies and has been put under provisional liquidation. The loan is said to have been facilitated by Trilinear group of companies Chairman Sam Buthelezi allegedly without the knowledge of Trilinear Empowerment Trust’s trustees (TET) – an allegation Buthelezi has denied. The TET trustees are behind the provisional liquidation application.
The R200m injection by Sactwu from HCI will mean that there is a shortfall of about R200m for the provident funds.
Asked why Sactwu had decided to inject R200m worth of its investment towards the retirement funds, Kriel told Moneyweb: “We have decided to do it because we expect the recovery process to take long. We do not [want] our members to be prejudiced in the interim.
“The [Sactwu] NEC is of the view that workers must receive immediate relief and assurance, whilst the union’s investigation and recovery process continues.”
Sactwu has appointed law firm Eversheds to do a forensic investigation in a bid to find out what happened to the funds lent to Canyon Springs.
TET trustees’ lawyer Barnabas Xulu from Xulu Liversage said the R200m injection was good news for the workers.
Source: Moneyweb – Phakamisa Ndzamela