Home News SACTWU secures legal standing in Canyon Springs 417/418 enquiries
SACTWU secures legal standing in Canyon Springs 417/418 enquiries PDF Print E-mail
Monday, 26 September 2011 16:50

PRESS STATEMENT:


The Southern African Clothing and Textile Workers’ union (SACTWU) has secured the legal  right to participate in a section 417/418 Companies’ Act enquiry, in the Canyon Springs liquidation proceedings. It will be the first ever such enquiry in South Africa in which a trade union participates, by way of interrogating witnesses who have been subpoenaed to attend the enquiry, and will usher in a new era in industrial relations in our country, where bosses and related persons of suspect  insolvent companies are called to account for their actions in  a legally sanctioned investigation enquiry. In this instance, SACTWU is pursuing the Section 417/418 enquiry in order to establish what has happened to about R100m of its members’ retirement funds, loaned to Canyon Springs by the Trilinear Empowerment Trust (TET),  to recover as much as possible of the missing monies and to ensure that if any guilt is proven by anyone, steps are taken to bring the guilty to book.

The new Companies’ Act, which provides for this type of enquiry, came into effect in May  this year. SACTWU has purchased the debtors’ rights of Dart Stationers CC to secure the legal standing to pursue the enquiry (this debtors’ purchase was done for a minimal amount of just over R900, being the amount that Canyon Springs owes Dart Stationers for stationary purchases). The agreement with the union states that Darts Stationers CC cedes its Canyon Springs debtor’s rights to SACTWU. A second similar agreement was entered into with Mel Solving IT CC, for just over R400. Prior to these two agreements, SACTWU had no legal standing in the matter, as the union itself was never party to the investment decisions of the retirement funds or in any of the decisions by the Trilinear Empowerment Trust Fund to lend retirement fund monies to Canyon Springs. These agreements now provide the union with the legal right to pursue a section 417/418 enquiry against anyone involved in the alleged misappropriation of about R100 million of SACTWU members’ retirement funds originally loaned to Canyon Springs. 

The union has arranged for the Section 417/418 enquiry to commence at the end of September this year and it is expected to run for about  10 non-consecutive days, with completion  expected by mid-October 2011. There-after, the Enquiry Commissioner is required by law to prepare and issue a report, including to pronounce on alleged criminal and/or negligent conduct by persons who have been subpoenaed to appear. The Cape High Court has now already appointed senior attorney Jan Reitz as the Enquiry Commissioner.

In terms of the new Companies Act, a subpoenaed person is required to answer all questions at the 417/418 enquiry and to produce such documents as may be required, failing which the person could be jailed.

We are determined to execute my take steps to of recover every single cent which may be missing and to ensure that if any wrongdoing is proven, the guilty must go to jail for a long time.

SACTWU has instructed that a number of high profile people involved in  the matter to be subpoenaed and the Enquiry Commissioner has now formally issued such subpoenas. Persons who have been summoned to date are as follows (more persons WILL be summonsed later):

•     Mohan Patel.  He is one of the key directors of Canyon Springs and is effectively one of the senior shareholders of Canyon Springs. He has acted as the equivalent of  Canyon Springs CEO for many years.

•     Enoch Godongwana.  He was a director of Canyon Springs.  When he became a Deputy Minister, he resigned as a director and his wife, Thandiwe Godongwana, then became a director of Canyon Springs.  Furthermore, him and his wife are, through their company, effectively senior shareholders in Canyon Springs.

•     Thandiwe Godongwana.  As stated above, she is a director of Canyon Springs and through the relevant company effectively a senior shareholder of Canyon Springs.

•     Erwin Da Gama.  Is a director of Leading Prospects (Pty) Limited (“Leading Prospects”), which company was allegedly granted an unsecured loan of at least R15 million by Canyon Springs.

•     Sam Buthelezi.  He is effectively the Chairman of and the person in control of all of the Trilinear companies, which were effectively the financial services provider and investment advisers for  the Trilinear Empowerment Trust (“TET”). 

•     Graig Philander.  He was one of the initial trustees of TET.  He was apparently paid a substantial consultancy fee, as a consultant for TET. 

•     Richard Kawie.  He claims that he was the National Benefits Co-ordinator of SACTWU and it is alleged that he has received substantial service fee payments from Canyon Springs, up to approximately R8m. In meetings with the trade union, he has consistently denied any wrongdoing.

•     Hyman Bruk of Bruk Munkes & Co, the auditors of Canyon Springs. 

•     Bonita Davids.  She was the bookkeeper for Canyon Springs.

•     PKF, the auditors of TET.  PKF recently withdrew the audited financial statements of TET for several years, because they alleged there have been misrepresentations made to them, after the union had queried certain aspects of their reports

•     Shahid Sulaiman.  He is a partner at Bowman Gilfillan, one of the top legal firms in South Africa, the attorneys that acted for the Trilinear companies and TET.  It is alleged that he made material written misrepresentations relating to the financial position of TET/Trilinear, allegedly also having given written assurances that the monies are secure in safety deposits.

•    Silumko Nondwangu, a former General Secretary of the National Union of Metal Workers of South Africa (NUMSA), who is alleged to have received payments from Canyons Springs for services which he claims to have legitimately rendered to the company

•    Spencer Witten: Richard Kawie’s PA

•     Siphamandla Jama.  He was originally employed with the Trilinear companies, as well as TET, and signed the founding affidavit in support of TET’s application for the liquidation of Canyon Springs.

•  Darawees Gasant: he acted as a Transaction Adviser to Canyon Springs

The following persons will appear  first during the commencing session this week,  and in this order, when the Enquiry starts on 29 September 2011:

•     Enoch Godongwana.

•     Thandiwe Godongwana.

•     Siphamandla Jama

•     Mohan Patel.

 

Issued by
Andre Kriel
SACTWU
General Secretary