GOVERNMENT IS COMPLICIT TO ALLEGED PSPF CRIMES

THE unintended consequence of the Cabinet’s unexplained decision to stop the investigation by the Financial Services Regulatory Authority (FSRA) into the operations of the Public Service Pensions Fund (PSPF) could well be that it is hiding something from the public, and justifiably so.

Yes, if the PSPF was squeaky clean, there was no reason for government to jump into the fray to stop the investigations unless it is complicit in the alleged criminal activities. In fact, the PSPF itself would not have initially resisted the FSRA investigations to the extent of forcing the latter to seek a court order to compel the former to open itself up to scrutiny to underpin its probity.

This, coming at a time when government is facing a similar cash flow problem that was experienced in 2010/2011, has already had the rumour machine in overdrive. Could it be government has surreptitiously tapped into the pension funds for serving and retired civil servants in order to meet its obligations, such as paying salaries? Or could it be that government has in recent times not been able to religiously meet its legal obligation of transmitting civil servants pension contributions to PSPF? Worse still, could government have sanctioned diversion of pensioners’ money into private investments for individuals?

As it turns out, when government was in financial dire straits in 2010/2011, it was reported that it had raided the coffers of parastatal organisations to raise money to meet its wage bill. It was also reported then that government had at times failed to transmit pension contributions of its work force to the pension fund in apparent breach of the law.

Already, preliminary findings by the FSRA as outlined in the affidavit of Chief Executive Officer Sandile Dlamini, for the abortive court application, are damning and should alarm not just retired and serving civil servants but the nation at large because they paint a grim picture of how the PSPF is run.

Among the rot already unearthed by the preliminary inspection include granting loans to entities without proper documentation; appointment of auditors without the approval of the Board and; decisions on major investments that did not involve its Investment Committee. Could it be that the PSPF investment of about E800 million in Montigny Investments, the successor to Sappi Usutu Pulp Company operations, is part of the rot?

As I see it, for government to intervene at the point it did with some of the dirt on PSPF operations already in the public domain in respect of the affidavit of the CEO of FSRA, leads to all sorts of conclusions. Besides denying PSPF the opportunity to disprove these serious allegations and accusations contained in the affidavit, government’s action could be interpreted to mean that what has been divulged is a tip of an iceberg and that it acted to ensure that much serious rot is hidden from the public domain.

It does not make any sense for government to deny PSPF an opportunity to rebut the allegations and accusations, themselves very serious and harmful to the image of the fund, contained in the affidavit with a view of protecting its integrity unless something on a grander scale is being hidden.

The question is what is it that has blurred government to an extent of adopting the posture it took, leaving PSPF badly tainted and without any recourse whatsoever through which to absolve itself of any wrongdoing to repair its already tainted image. 

But the one conclusion gaining traction apropos government’s decision is that of complicity in all the allegations and accusations avered in FSRA court papers before government’s ill-advised decision to pull the plug to stop the matter from being determined on merits. There are allegations of serious crimes such as fraud, corruption and money laundering emanating from the outcome of the preliminary inspection that the regulatory body wanted to investigate. Thus, government’s action makes it complicit to these alleged crimes for which it must be held to account.

Perhaps answers to this sordid affair can be found in government’s sudden decision a few years ago, to change the status of PSPF into a Category A parastatal and its continued resistance to reverse same even at the wake of a parliamentary resolution to that effect.
It is sad that the outgoing legislators are either too shy (also read as afraid) or pre-occupied with electioneering now that the polls are around the corner not to have ventilated on this matter.

Yet it is the very same public – serving and retired civil servants - whose votes they will need to return to Parliament, whose interests they are failing to protect. Instead of looking up to government to come to the party to fight serious crimes against the nation we now have to look up to organised labour to be a catalyst in this sordid story.

Yes, labour unions have promised to take action in support of the FSRA. Hopefully, government would not have removed the incumbent CEO and installed a stooge ready and willing to obey his master’s voice and compromise the integrity of the organisation and by so doing, complete the capture of the FSRA, thereby compromising the financial services sector.

Perhaps this is the era of evil that Edmund Burke, the great political philosopher, offered in this timeless moral observation about 200 years ago: “It is necessary only for good men/women to do nothing for evil to triumph.” 

To the labour unions, it may take more than petitions to get to the bottom of unraveling the real state of PSPF. The question is, are they ready for the task or will they also be paralysed by the same fear that has silenced the people from speaking ill of the Tinkhundla political system.



    
   

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