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Fund trustee loses bid to fight appointment

RELEBOHILE TSOAMOTSE

MASERU – Public Officer’s Defined Contribution Fund Trustee, Komane Motaba has lost a court bid to interdict the appointment of one ’Nete Hanyane Ramone as the Fund’s Acting Principal Officer. High Court Judge Moroke Mokhesi dismissed Motaba’s application with costs for lack of merit. Motaba petitioned the court in February seeking not only nullification of Ramone’s appointment but also that the fund be prevented from taking any steps in relation to the execution of a forensic audit of the administrators of the fund.

He had also asked the court to declare that joint board sittings by Public Officers’ Defined Contribution Pension Fund and Special Officers’ Defined Contribution Pension Fund, particularly with respect to the appointment of Principal Officer (acting or substantive), was both illegal and unlawful and that resolutions or decisions flowing therefrom are a nullity.

He called for regularisation of acting appointment of a Principal Officer, saying one Thabo Thulo should act, or any other legally competent person within the secretariat be appointed pending the determination of his court application. The Fund’s Corporate Secretary, Sempe Moshoeshoe was made to act as the Principal Officer but Motaba argued the appointment was illegal.

Motaba said the appointment of the Corporate Secretary as an acting Principal officer was contrary to the dynamics of corporate governance and sound administration for the legal advisor of both the administration/secretariat and board adding that he is conflicted.

According to Motaba it was Moshoeshoe’s legal obligation as the legal advisor of both the Secretariat and the board to alert them of his conflicted status.

“I aver that this approach compromises the independence and functional autonomy of the office of Corporate Secretary and also his role as the Chief Legal Advisor of the secretariat of the fund,” he argued.

These incidences prompted him to approach the court saying he considers them “to be in utter violation of the laws governing the Fund. I feel duty-bound in the exercise of my Fiduciary Duties to stage this litigation in order to avert the potential harm that shall be visited upon the beneficiaries of this fund but, above all, the illegal manner with which decisions have been made with respect to some of the crucial aspects of governance regulated by the statute.”

On top of his prayers, Motaba asked the court to declare participation of two of his fellow trustees (Futho Hoohlo & Monaheng Mahlatsi) in the board sittings as irregular and conflicted.

One of the meetings was the Evaluation Committee on the procurement of administration services for the Fund and the complainant argued they were conflicted to have sat in the said meeting because when the Board was sued in a different litigation, they made common cause with those who sued, thereby breaching their “fiduciary duties”.

Judge Mokhesi dismisses this allegation in his judgement saying there was no conflict of interest.

“I do not agree that there was a conflict of interest on the part of the board members when participating in the statutory exercise of procuring administration services for the Fund, nor do I see how the board or the two respondents could be disqualified from partaking in this exercise merely because there is a pending matter which pertains to a completely different matter of appointing a forensic auditor. There is no court order barring the board from engaging in a process to appoint the administrator of the funds,” read the judgement in part.

On the claim that Hoohlo and Mahlatsi breached their fiduciary duties, Justice Mokhesi states that, “It has not been stated which of the fiduciary duties have been breached. The court is left to speculate, but if by ‘breach of fiduciary duty’ it is meant that they did not act in good faith and in the best interest of the fund and its members, the applicant’s case stands on a very weak footing for the simple reason that what is best for the company or the Fund is best known by the trustee and not the court.”

According to the judge, the two trustees were at liberty to exercise their own individual judgment once a concern was raised regarding the legality of the board’s decision…

Motaba had also asked the court to interdict the Fund from taking any other steps in relation to the execution of the forensic audit but the court found that he does not have a locus standi (legal right to sue) on the matter.

“If the decision of the board to commission an investigation into the affairs of the administrator, while that matter is yet to be determined, prejudices the rights of the parties therein or if it breaches some common law rule, it is for the parties embroiled in that matter to seek relief to prevent prejudice which they stand to suffer in view of the course of action taken by the board. Clearly, the applicant does not have a direct and substantial interest in the relief that he is seeking.”

The judge also declined to issue a writ of mandamus for the Ministry of Finance to cause for the investigation of the Board with respect to the appointment of acting or substantive Principal Officer as well as Hoohlo and Mahlatsi’s conduct.

This is what the judge had to say, “In this regard the applicant contends that the Minister of Finance (8th respondent) should investigate the board in relation to the appointment of Principal Officer (acting or substantive); and secondly, in relation to what he terms “conduct of 6th and 7th Respondents with respect to their role and mandate in the Board particularly with respect to their alliance with the beneficiaries in CIV/APN/114/2020.”

I have already determined that I find nothing untoward in these respondents making common cause with the applicants in that case, however, even if I am wrong in this conclusion, it is my considered view that the relief for a writ of mandamus should fail.”

He goes further to state that “a writ of mandamus will only be granted against a public official where there is a clear statutory duty to perform a particular action. In the present case I did not find anywhere in PODCF or SODCPF Acts where the Minister of Finance is enjoined to investigate the affairs of the board or the conduct of its trustees. Instead, the powers of investigation are found elsewhere, and that is in the Pension Funds Act 2019.”

 

 

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