Africa-Press – Lesotho. THE fight between NBC Lesotho and Akani Retirement Fund Administrators over the contract to manage the Public Officers Defined Contribution Pension Fund (PODCPF) could be a continuation of the nasty battle the companies are having in South Africa.
Their scuffle in Lesotho is over the contract for the administration of the pension fund’s M6 billion purse, while the battle in South Africa is over the management of R8 billion belonging to the Chemical Industries National Provident Fund (CINPF).
There is a striking resemblance in the conflicts because they involve largely similar players and the techniques of the ‘warfare’ appear to be the same.
In both cases Akani seems to be muscling in on NBC’s clients. The trustees of both retirement funds have been drawn into the fights while lawsuits have been filed in Lesotho and South Africa.
Two weeks ago NBC Lesotho was awarded extension to their contract as administrator of the PODCPF, whose members are about 40 000 government employees. This has angered four of the nine trustees who argue that the contract should have been won by Akani.
An association of pensioners, who are voluntary members of the PODCPF has filed an urgent High Court application to block the contract but the case has stumbled after the court refused to enrol it on an urgent basis because of the lockdown.
In the meantime, four of the nine trustees who are empowered to appoint service providers to the PODCPF, continue fighting in Akani’s corner despite having democratically lost the vote on who should get the contract.
NBC Lesotho has been the PODCPF’s administrator since 2008. Some of the allegations the four trustees and the association of pensioners raise for trying to block the extension of NBC’s emanate from an unrelated battle in South Africa.
To understand what is unravelling in Lesotho you have to start with what is happening between the two companies in South Africa. It’s a fight laden with accusations and counter-accusations.
It’s a battle with all the intrigues of corruption, corporate espionage and the peddling of trade secrets. There appears to be a rat race to amass dirt to smear rivals vying for the same deal.
Akani is fighting NBC Holdings and its subsidiary, NBC Fund Administration Service, over the CINPF contract to manage the administration of M8 billion that belongs to 21 600 members. NBC Holdings has held that contract for nearly three decades. NBC Lesotho and NBC Holdings are sister companies.
Some members of the CINPF, joined by NBC Holdings, have challenged the appointment of Akani in court on the basis that the appointment of Akani was based on “false and misleading information” fed to the CINPF’s trustees as well as allegations of corruption on the part of Akani and others.
They allege that the trustees were manipulated by several NBC employees who worked with Akani to destroy its relations with the Fund. Other allegations are that the trustees violated the Fund’s rules and failed to consult structures set up in terms of the rules of the fund before the decision.
Also in contention is how the trustees allegedly relied on a preliminary “forensic” report on an audit conducted on NBC. This report was never presented to NBC for comment before presentation to the board of trustees.
At the centre of this are two former senior NBC employees, Sipho Ginya and Victor Chaane, who allegedly connived with Akani and some trustees to push out NBC.
NBC says its investigation has revealed Ginya received various payments from a company called Neighbourhood Funeral Services, whose only director is Zamani Letjane, the Managing Director of Akani.
Until they were fired by NBC in early December 2019, Ginya, Chaane and members of their team were consultants to the CINPF and therefore managed the relationship between NBC and the fund.
Because of their roles, they were privy to NBC’s business methods. In court papers NBC doesn’t say at exactly what point the two started plotting with Akani.
The company however gives a timeline of events that seems to indicate that this was an elaborate scheme. On November 21/22 last year the CINPF’s board decided to terminate NBC’s contract.
Although Chaane and Ginya and members of their team were in that meeting, they only informed NBC about the decision on November 28. NBC says by that time it had heard of the decision through unofficial channels.
The company says it confronted the two on 29 November but they immediately submitted resignation letters through an attorney. NBC did not accept their resignations, insisting that they serve their contracted 30 days’ notice.
The company then summoned them to a disciplinary hearing on 6 and 7 December. They did not attend but the hearing went ahead in their absence and they were dismissed.
On 27 November a sub-committee set up by the CINPF board invited Akani and ten other companies to submit bids to take over NBC’s contracts with the pension fund.
A day after that meeting Akani submitted a bid for most of the contracts that NBC had lost. On December 6 the same sub-committee of the CINPF board made a shortlist of three bidders to be considered for these contracts.
Akani made its presentation to the sub-committee on December 11 and were appointed. Oddly, the sub-committee then conducted a “due diligence” into Akani’s abilities at their offices a day later.
On December 13 Akani’s appointment was then ratified by the full board. NBC argues that it was practically impossible for the board to have done a thorough due diligence on Akani in just a few hours.
It says its investigations have revealed that Chaane and Ginya had been working with Letjane for months prior to this to get NBC fired and Akani appointed.
Chaane and Ginya, NBC says, had several meetings with Letjane days and weeks before the CINPF board passed the resolution to fire NBC. To support that allegation of corruption NBC reveals that Akani and Neighbour Funeral Scheme made dubious payments to Chaane and Ginya.
For instance, on December 20 Chaane received M52 000 from Akani while Ginya received M40 000. Between January 7 and 15 Neighbour Funeral Scheme paid about M8000 to Ginya.
Around the same time Chaane received M40 000 from the same company. In his affidavit Letjane says Chaane and Ginya approached him for jobs on December 4 but he told him that there were no vacancies at Akani.
He says he told them that there were positions at Neighbour Funeral Scheme. Their contracts show that they were to be paid M30 000 each per month plus expenses but NBC says its investigation indicates that they were paid more.
NBC says that their contracts “bear little connection to their stated purpose” which included gardening, plumbing, electrical and maintenance services.
So far, the two have been paid more than M140 000. Akani paid some M40 000 to Ravhuhali, another former NBC employee. NBC says it has information that more substantial payments will follow.
It also says there is reasonable suspicion that Neighbourhood Funeral Scheme does not operate as a legitimate financial services business and could have been just a vehicle for Akani to pay bribes to Chaane, Ginya and others.
The company says there is evidence that Akani and Letjane could have also influenced the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union to instigate NBC’s removal.
It alleges that between November 15 and 17 Akani hosted a union staff meeting and its year-end function at its hotel. It is alleged that Akani provided transport, accommodation, T-shirts and lavish entertainment to those present.
CINPF members have argued that the board terminated NBC’s contracts without consulting the fund’s Regional Advisory Committees (RACs) and Local Advisory Committees (LACs) in contravention of the fund’s rules.
Members of both committees have challenged the termination of NBC’s contracts and Akani’s appointment in the High Court. They want the court to nullify both NBC’s dismissal and Akani’s appointment.
Akani however vehemently denies the allegations of corruption, insisting that it had nothing to do with NBC’s troubles. It says NBC was fired for lack of transformation in its management, high fees and alleged poor service delivery.
The company argues that its appointment was fair and above board. It therefore says the NBC is not entitled to any of the relief sought by the members in court and that the case should be dismissed. On March 12 however the High Court of South Africa’s Gauteng Local Division agreed with the members.
The presiding Judge, Justice Vally ruled that the CINPF should be interdicted from implementing the appointment of Akani as the fund’s administrator and that the NBC should continue rendering all services to the fund until the matter is heard and finalized on July 31 this year.
He dismissed Akani’s argument that the members had created the urgency by not filing their case immediately after finding out that the contract was to be cancelled.
The judge also found that the allegations of corruption by Akani, Chaane, Ginya and others implicated could not be ignored. The judge said it is for the court to ultimately and finally decide if the termination of NBC’s contract and the appointment of Akani was lawful.
It is possible that how the court rules in South Africa could have significant implications on the two companies’ squabbles over the PODCPF contract in Lesotho.
