The Financial Services Board (FSB) has placed the control of the multibillion rand pension and beneficiary funds in the hands of, among others, a trustee with a chequered history.
The FSB, which regulates the entire financial services sector except banks, has appointed Jan Mahlangu as one of the interim trustees of the SA Local Authorities (Sala) Pension Fund and the Municipal Councillors Pension Fund (MCPF).
In 2010 Mahlangu resigned as Cosatu’s retirement fund policy coordinator after the union charged him following allegations that he accepted a bribe in the form of a new Audi A4 from SA Quantum. Mahlangu’s Cosatu job involved overseeing the performance of all pension fund service providers – including SA Quantum – on behalf of the federation and its affiliates. In 2013 Cosatu reappointed Mahlangu to his old job.
FSB’s director of pension funds, Olano Makhubela, said the regulator saw nothing wrong with appointing Mahlangu as an interim trustee to both the Sala and MCPF.
“Mahlangu was appointed based on his experience and technical abilities, including his current involvement with Cosatu as retirement funds coordinator since August 2013, Nedlac public finance and monetary policy chamber as chamber coordinator since August 2013, the financial sector charter council as council and board member since August 2013, the Unemployment Insurance Fund as a board member since August 2013, the Batseta council for retirement funds as a director since April 2015, the Association for Savings and Investment South Africa as a board member of the academy since December 2014.”
Following reports that Mahlangu received the car from SA Quantum, the company appointed Advocate Dali Mpofu to investigate. A report seen by City Press indicates that Mpofu found that Abraham Nduru, the late former SA Quantum chief executive, had paid for the car from the account of a company called FML Life, and not SA Quantum.
Although the car was “somewhat questionable”, Mpofu concluded that the gift was a gesture of friendship between Nduru and Mahlangu.
“I note that it is to be expected that the size and value of the A4 motor vehicle as a gift can raise many questions. But it must also be said that there are still people who can assist a friend without expecting anything in return. This may be part of ubuntu among fellow citizens,” he said, adding that he had no proof that Nduru’s businesses stood to benefit as a result of the gift to Mahlangu.
Makhubela said Mahlangu was fit and proper for both positions.
Of his appointment to the MCPF, Makhubela said “post-2013, Mahlangu has been involved with various entities as mentioned above.
In addition, Mahlangu had at the time of his appointment to MCPF already been appointed to Sala where the FSB was “satisfied with the work done under his chairmanship”.
Mahlangu chairs the boards of both interim trustees in the two funds. And Makhubela said the other trustees in both funds, and not the FSB, had appointed Mahlangu as their chairperson.
Mahlangu denied that he was involved in the SA Quantum bribery scandal, adding that two investigations by SA Quantum and the FSB had cleared him.
“An independent investigation initiated by the shareholders of SA Quantum cleared my name. This also included an investigation conducted by the FSB which also cleared my name. The execution of my duties, which included sitting in various boards, needs to be understood in the context of these investigations which all cleared my name. My behaviour has always been above board,” he said.
However, Makhubela said the FSB never investigated Mahlangu.
“The FSB’s investigation was into SA Quantum and not Mahlangu, as he is not a regulated entity. Our investigation did not find wrongdoing by SA Quantum. Unfortunately, Section 22 of the FSB Act prohibits us from sharing the report.”
Mahlangu, who personally responded to questions sent to Cosatu, said “the federation decided through a decision by the central executive committee to re-employ me and I continue to do my job according to the mandate of the federation”.
Asked if he was fit and proper to work in the financial services sector following the controversy, Mahlangu said: “I believe that I have the competency and integrity required to discharge the responsibilities of a trustee to which my appointment relates to at various boards. I have the necessary and relevant experience obtained over many years in the pension fund industry. My conduct at all times has been above board and has not been found wanting by the registrar of pension funds at any stage.”