On Monday morning this week, case number 50596/2010 was postponed by a judge of the South Gauteng High Court in Johannesburg until November 7 and 8. Behind that postponement lies some of the most amazing documents I have yet read relating to the protection of the retirement savings of ordinary, hard-working people.
To go back a few steps. On December 22, the Cadac Pension Fund was placed under the provisional curatorship of Johannesburg lawyer Tony Mostert, when the Financial Services Board (FSB) brought a successful ex parte in camera application to the High Court.
The Cadac fund is an occupational fund of the engineering company Cadac, known for its cooking and heating products. The executive chairman of Cadac is Simon Nash, who is currently standing trial on charges of theft, fraud and contravening the Prevention of Organised Crime Act, stemming from the stripping of surpluses (about R100 million in current values) from the Sable Industries Pension Fund, the Power Pack Pension Fund (later the Cullinan Group Pension Fund) and the Cadac Pension Fund.
In an affidavit supporting the provisional curatorship application in December, Dube Tshidi, the chief executive of the FSB, claimed he had prima facie evidence that Nash had used about R10 million of the Cadac fund assets to pay for his criminal trials and that there were other transactions involving loans and property purchases that needed to be investigated.
The postponed case on Monday had a dual purpose: to hear an application by the FSB to confirm the curatorship of the fund and to listen to an objection from questionably appointed “new” trustees of the Cadac fund to the appointment of Mostert as the curator. The basis of the objection is that because Mostert is the curator/liquidator of the Sable and Power Pack funds he is in a position of conflict of interest because of a potential claim of about R30 million by the funds against Cadac.
Mostert rejects the argument mainly on the basis that his claim is not primarily against the Cadac fund, which was an innocent bystander to the surplus stripping, but against Nash who, with others, organised the alleged plunder of the Sable and Power Pack funds.
Interestingly, the “new” trustees are not opposing the curatorship but want to nominate their own curator – someone from auditing company KPMG.
KPMG is the company that has been accused of failing to do its job properly in stopping the stripping of the surplus of the Power Pack Fund.
KPMG is the company which, in a thinly disguised threat last year, implied it would take legal action against Personal Finance for questioning its failures in the surplus stripping scandal.
The case was postponed on Monday because the “new” trustees had not had time to respond to Mostert’s extensive answering affidavit to their initial claims on the conflict of interests. Mostert dismisses, for various reasons, the independence of the “new” trustees, claiming they are nothing but pawns in the hands of Nash. The trustees themselves sought an indemnity from Nash before agreeing to be trustees.
This week I finished reading the excellent but shocking book Killing Kebble, by Mandy Weiner, an Eyewitness News reporter working for Radio 702 and Cape Talk 567. It is a book filled with details of skullduggery, corruption and general nastiness at the top levels of corporate life and government.
Reading the court papers relating to the Cadac case filled me with the same revulsion and horror I felt on reading Killing Kebble – albeit without the murders, attempted murders and the assisted suicide of Kebble.
There are now many thousands of pages of legal documents relating to the Cadac case and each new set brings out yet more allegations, which even if one tenth are found to be true, are absolutely shocking, particularly in the extent to which some people will go plunder the retirement savings of ordinary people.
Let me state emphatically that the many allegations made in all the Cadac fund documents so far, both by Nash and his supporters on the one side and the FSB and Mostert on the other, still have to be tested in the courts – and the sooner they are the better.
The allegations being tossed to and fro range from theft, blackmail, personality assassination, electronic eaves-dropping through to claims of a sexual nature, drug abuse and threats of suicide. Most of these allegations I will leave for another day and for a more appropriate vehicle.
The main allegation you should know about is that Nash, his wife Elena Forno Nash, and others approved the removal of more than R16 million from the Cadac fund to pay for issues directly or indirectly relating to Nash’s defence in the Sable/ Power Pack criminal trial. Nash has argued that he was using the money to protect the Cadac fund from claims by Mostert.
In court papers there is plenty of documentary evidence that much of the Cadac fund’s money was, in fact, used to fund Nash’s criminal trial, with more than R2 million alone being transferred to his instructing attorneys in the trial, Cowan Harper, in December last year.
Much of the money to pay for the criminal defence was channeled through Johannesburg attorney, June Marks.
It is shockingly alleged by the FSB and Mostert, with backing documentation, that Marks was making inflated claims for the payment of a bevy of advocates Nash had consulted or used in fighting the criminal charges against him and/or were used on Cadac fund matters.
For example, she billed the fund R2.76 million to pay Advocate Willem de Bruyn, who is representing Nash in his criminal trial, but De Bruyn’s actual invoices for the period total R2.41 million – a difference of R354 487.
In all, more than R10 million was paid by the Cadac Fund to Marks to pay her fees and those of nine named advocates and a number of unnamed advocates consulted and employed for legal services related both to Nash’s criminal charges as well as affairs of the Cadac fund.
Interestingly, it is alleged that the expenditure occurred after senior council and respected pension fund expert Martin Brassey was consulted in 2001 by the Cadac fund and who told the fund that the Sable/Power Pack surplus stripping “appeared to be fraudulent” and “clearly established Nash’s liability for the transactions”.
In about September 2010, Marks broke off her professional relationship with Nash.
During December last year, as the FSB’s Cadac net was closing in on Nash, Marks offered to assist Mostert, the FSB and the National Prosecuting Authority (NPA), which is also investigating the alleged misuse of the Cadac funds. Marks provided extensive detail and documentation about the financial dealings around the surplus stripping, the beneficiaries of the stripping and the management of the Cadac fund.
But her co-operation came to an abrupt halt when the FSB brought out a draft report in April this year detailing the allegations of the mismatches in payments claimed from the fund by Marks and invoices submitted by the various advocates.
Then follows a fascinating story of how Marks first allegedly demanded that any possible action against her be quashed and that she be paid for the information she was providing. When she was unsuccessful, she refused further co-operation, including completing and signing an affidavit that was to be used in the current court curatorship battle.
Instead, according to Mostert, she then approached Nash and claimed that she and her advocate had set up Mostert and his team, which included recording conversations when she was not present, all of which she was prepared to sell to Nash.
Mostert claims in his affidavit that, since then, Marks has provided Nash with information and has made numerous untrue and defamatory statements about Mostert, his team, the FSB and the NPA. Marks did not respond to an email sent to her by Personal Finance this week.
The odd but good thing about all this is that Mostert continues as provisional curator, whose brief includes investigating what has happened to the assets of the Cadac fund.
It is quite possible that his investigations will be completed by the end of the year and he will have taken action to recover any money found to have been misappropriated.
Mostert has proved he is a bulldog when it comes to fighting for pensioners. The problem is that by the time people like him are involved pensioners lose out because of the costs involved and/or they will die before money is recovered.
The lesson in all this is that retirement fund trustees need to do their jobs properly. They need to keep a careful eye on employers and not be intimidated. It is also incumbent on members to elect trustees who are strong and knowledgeable personalities.
It is your money that trustees must protect; and there are just too many people out there who feel they have some sort of right to your money. It is no easy job.