Administrator in expensive conflict of interest saga

Johannesburg- In the unfolding scandal involving the administrator of the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu), Thulisile Mashanda, it has now emerged that she has appointed a company in which she is an active director to provide services to the embattled union.

Sunday World has seen two proofs of payments dated August 2020 to professional services firm Kreston, which total nearly half a million rand, with insiders saying the amount would have increased significantly by now.

“Mashanda has been running a very tight ship since she picked up that concerned people in the finance department were leaking information to the union to expose the rot happening under her watch. We suspect further payments were made since she put her allies in the department to stop the leaks,” the source said.

According to the Companies and Intellectual Property Commission (CIPC) records, Mashanda became the director of Kreston in June 2019 and remains an active director.

Confronted with the conflict of interest allegations, Mashanda avoided answering specific questions. “The firm [Kreston] was engaged to carry out accounting services in terms of paragraphs 3.7 and 3.8 of the judgment for case J2896/18 of the Labour Court of South
Africa. Applicable financial information has been and will be communicated to the registrar in accordance with the administrator’s reporting obligations set by the judgment of the Labour Court for case J2896/18.

“My full professional background was disclosed prior to my appointment as administrator,” she said.

She, however, did not disclose whether that background allowed for conflict of interest,  such as appointing companies in which she is a director.

Mashanda, who is a qualified chartered accountant, was this week |appointed by the cabinet as a board member of the Land Bank. She also sits on the Ithuba board.

Sunday World previously reported that she earned north of R500 000 a month as Ceppwawu’s administrator. This week, the paper saw proof of payment made by Ceppwawu to her to the tune of R839 000.

The payment was made in August 2020, just two months after her appointment as administrator.  She has, however, denied that the payment was her monthly fees, but did not elaborate on what she was being paid for.

The Labour Court in June last year placed Ceppwawu under administration, stripping its leaders of all powers. Mashanda was then appointed administrator and has been granted powers, which include operating or closing existing union’s bank accounts, controlling its funds and finances and determining its annual budget.

This order resulted from an application brought by the Department of Labour’s registrar of trade unions, advocate. Lehlohonolo Molefe, after the union had failed to submit audited financial statements from 2014 to 2017, as well as its agency shop’s audited financial statements for the same period.

Molefe did not answer questions on whether he was aware of Mashanda’s conflict of interest. Tension has also been brewing between Molefe and Ceppwawu’s general secretary, Welile Nolingo, over Mashanda’s role.

Nolingo last month dispatched a letter to Molefe asking him to intervene in the affairs of the union, particularly how Ceppwawu Investment (CI) resources were being used.

“During the first 12 months of her tenure, the administrator requested and received R42-million from CI to cover her expenses. This equates to R3.5-million per month … it is the union’s understanding that the administrator has requested a further R72-million from CI … this behaviour, sanctioned by the Department of Labour, can be compared to state capture,” reads in part a letter dated November 25.

Molefe responded to the letter on December 1, telling Nolingo to mind his own business.

“It is not clear from your letter whether you have been granted authority by the administrator to write this letter and the report, given that the union is under administration …”

Nolingo did not hold back when responding to Molefe on Wednesday, accusing him of “tacitly” approving of Mashanda’s conduct.

Mashanda denied her office had received a loan from the CI.

Sunday World has seen a loan agreement between CI and the administrator on behalf of the union, where the parties agree that the loan would not “under any circumstances exceed in the aggregate sum of R42-million”.

Ceppwawu has 55 000 members and its investment company holds an investment fund worth more than  R4-billion.  It has stakes in Aspen, Sasol, Nampak and Transpaco.

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