NBC loses major client to Akani in SA legal feud

The two pension fund managers’ tussle continues in Lesotho

TEBOHO KHATEBE MOLEFI

MASERU – Akani Retirement Fund Administrators (Akani) is set to take over the administration of the lucrative R6 billion South African Chemical Industries National Provident Fund (CINPF) following the Gauteng High Court Local Division dismissal of rival NBC Holdings application to hold on to the administration of the Fund. NBC Holdings has administered the CINPF for over two decades but were muscled out after the Fund accused them of fraud and maladministration.

In his judgement that is bound to reverberate in Lesotho where both companies are also battling for the administration of the country’s Public Officers Defined Contribution Pension Fund (PODCPF), Judge J Vally of the Gauteng High Court Local Division labeled arguments advanced by NBC to continue to administer the CINPF after their December 2019 booting by the CINPF as inadequate and an abuse of court processes – he dismissed the NBC application to retain control of the CINPF with costs.

The judge also found the NBC to have used unorthodox tactics in their business conduct, inciting CINPF members against their Trustees, interference in the affairs of the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union, NBC’s poor service and disrespect to the CINPF as well as charging exorbitant fees. Four months ago the Lesotho Public Officers Defined Contributions Pensions Association (PODCPA) filed a high court application demanding a forensic audit into NBC Lesotho, as engaged to administer the PODCPF.

Speaking to Public Eye in an interview last month the pensioners’ association spokesperson, Ithabeleng Phamotse, said the PODCPF Board’s expressing of intention to oppose the association’s application was not only be illogical but suicidal because pensioners owned the funds that NBC administered and that they were “within our rights to demand transparency.”

“Board members must always remember that, their fiduciary duty is to always safeguard assets of their members. They must always remember that, there is always a story behind a story. Members and Boards of Trustees are well within their rights to demand information from service providers regarding their money, how service providers are performing against their contracts and requesting forensic investigations on their funds,” Phamotse said. According to Phamotse, it was only prudent for the Board to acknowledge pensioners’ concerns as that would “prove they have nothing to hide.”

“Decent service providers should see this as a positive and co-operate with processes, if they have nothing to hide. At minimum, an intense due diligence must be performed on service providers every 3 years,” Phamotse said. “If Board members do not act in the best interest of the members and the Fund, they can be sued in their individual capacity, during or even years after they served on the Boards. One cannot help but wonder if the Board of PODCPF is holding on to NBC because they are afraid that NBC will apply its known modus operandi, which has been seen in few cases, and sue or destabilise the Fund should they get terminated.”

Phamotse added that if the tender process leading to Akani and NBC Lesotho being shortlisted was transparent enough “the service provider has no business opposing a review of all processes” and that “if the process is neat so should the outcome.” NBC Lesotho’s woes are intricately entwined with those of its mother company based in South Africa, NBC Holdings, which holds a 45 percent controlling stake in its Lesotho satellite company. The PODCPF has since filed an opposing affidavit to the PODCPA application opposing the continued engagement of NBC Lesotho in the administration of their M7 billion 38 000 member Fund.