Dear+Danisa,+Jocelyn+Newmarch+and+Maya+Fisher-French,+M+and+G

Mail and Guardian, Johannesburg, //2 March 2007 11:59//
=Dear Danisa…=


 * Jocelyn Newmarch and Maya Fisher-French**

We are concerned that you, the mother of empowerment, should be embroiled in such an ugly scandal.

Unfortunately, we can’t say that we’re surprised that you and Absa have decided to terminate your services as a director. For the last few weeks, this parting has seemed inevitable. The surprise, if any, is the news that your services have been terminated. Aren’t these things normally phrased as “leaving to pursue other opportunities”?

Gill Marcus, Absa’s new chair, will be glad that both Absa Group and Absa Bank have already set the ball rolling.

We understand that you’re contemplating legal action against Absa, so we haven’t heard the last of this case. The bank hasn’t commented further on this announcement. According to the Bank Act, in deciding whether someone is fit to stand as a director of a bank, the Registar will consider whether the candidate has taken part in business practices which were deceitful, prejudicial or otherwise improper (whether unlawful or not) or which brought discredit on that person’s methods of conducting business or had taken part in or been associated with any such other business practices as to cast doubt on his or her competence and soundness of judgment.

We couldn’t help noticing an interview you gave to Moneyweb. “As a director and/or a trustee, you are as good as the information that is given to you,” you said.

The problem, dear Danisa, is that you were both director and trustee. That’s a clear conflict of interest in anybody’s language.

The Financial Services Board has made it clear that it is not possible for a trustee in your position “to exercise their discretion in the manner in which will be to the best interests and general welfare of the beneficiaries”.

If a trustee is not pulling the line, who is watching? Once the full report is available, you and the other trustees could still face prosecution in your personal capacities.

Admittedly, it’s not all your fault. Currently, umbrella trust funds, which by their very nature are for widows and orphans and which manage billions of rands, have virtually no supervision and are not required to submit audited reports. If audited reports aren’t submitted, it’s very difficult to remove the trustees. SABMiller may have wanted to, but they needed to have a case they could prove against the trustees.

That certainly doesn’t excuse what happened. It looks like Fidentia cosied up to the Living Hands trustees by paying high salaries and offering substantial shareholdings. Your own company, the South African Women Investment Holdings, was Fidentia’s BEE partner and held a 10% stake. As soon as Fidentia had control of the Living Hands Umbrella trust they moved all the assets from Old Mutual to Fidentia.

In fact, the existing fund trustees had the option to ensure that the new administration company could meet the criteria. If they were not happy, the trustees had the right to move the trust administration to an appropriate service provider.

We’ve been told this by Giselle Gould from Fairheads Umbrella Trust Company. But we suppose that what you were trying to say is that you couldn’t possibly have known that hundreds of millions of rands belonging to widows and orphans was being pilfered.

You couldn’t have known because nobody told you.

But you could have checked your salary slip and wondered why you were being paid R54000 a month by Fidentia when you only earned R12000 as an Absa director. Surely this discrepancy was enough to set alarm bells ringing?

Then there is the matter of the loan. You remember the one -- the loan from the Living Hands Trust for R7,95-million. You said it came from Fidentia Holdings, but it seems to be trust money all the same.

We’re concerned that you didn’t realise where the money was coming from when, after all, you were a trustee too.

We’re even more concerned that the loan was reflected as an “investment”. Loans should always be reflected as such in the books.

You could also have asked yourself what was going on when Fidentia was prepared to grant you this loan without any repayment or interest terms.

But we think you might find it difficult to take our advice. We understand. After all, you are a director of 71 organisations, according to the Registrar of Companies.

We think this is far too much work and responsibility for any one person. Especially as these are in addition to your duties as head of the National Skills Authority.

We understand that many of these are not major enterprises, but many, including Absa, are and require a large amount of work to justify your pay cheques.

What really worries us is that it is not your money which was put at risk. It belongs to some of the poorest people in the country, widows and orphans who depend on it.

We did try to contact you directly, but your spokesperson said you weren’t taking calls.


 * From: http://www.mg.co.za/articlePage.aspx?articleid=302730&area=/insight/insight__economy__business/**

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