The South Gauteng High Court has found in favour of Anglo-American Platinum in a long-running dispute over the transfer of the company pension fund to an Old Mutual superfund in a landmark case that pits the interests of pension fund members against the need to reduce the cost of managing funds. But it’s not over yet.

Employer representatives of the Anglo Platinum Pension Fund (AGPF) previously successfully transferred the two retirement funds, Amplats Mines Retirement Fund (AMRF) and the Amplats Retirement Fund (ARF), into the Old Mutual Superfund in 2013/14.

It constituted the largest transfer of a corporate pension fund into a so-called “umbrella” fund in SA history.

But employee representatives have claimed in court papers that the previous principal officer (PO) of the two funds, Mark de Klerk, received kickbacks from Old Mutual in order to support the transfers. Both De Klerk and Old Mutual vehemently deny the allegations.

The allegation forms part of the objection stipulated in the court papers, for the latest proposed transfer, this time around of the Amplats Group Provident Fund (AGPF) to the SuperFund, where the board of trustees of the AGPF was attempting to hinder the employer evoking a section 14 transfer (of the Pension Funds Act) of the last standing retirement fund.

However, the panel of judges of the South Gauteng High Court on 18 March found in favour of the platinum miner.

The employers contended that the fund was delaying the process and thus sought an order from the court requiring the fund to do all things necessary to complete the transfers of the employee members to Old Mutual.

The fund, however, contended that the objections around corruption of previous transfers have not been properly dealt with and it is unable to process the current transfer until these have been dealt with.

“It is common cause that, as participating employers, it is the sole prerogative of the employers ‘to determine and vary to which fund… its employees belong.’ The rules also compel the fund to effect these transfers,” the court stated.

Following contradictory orders and after much deliberation, the court found that the supporting evidence did not sufficiently support the claim that the employer was interfering with the board’s discretion or the members’ choice, or that the transfer was in contravention of the law.

The courts said the latest transfer should go ahead, but if the statements of organised labour are anything to go by, the war is far from over. Both Cosatu and Amcu have joined the cavalry, and taking the cause to the Supreme Court of Appeals is not out of the question.

Jan Mahlangu, the retirement funds coordinator for Cosatu, said in an email to Business Maverick that big companies are advising employers to move their stand-alone funds into these commercial umbrella funds to “save cost”.

“Other reasons which are nothing else but taking control of our hard deferred wages (retirement funds) for their own benefits,” he says.

The PFA requires all retirement funds to allow members to elect at least 50% of the representatives on the board of a fund.

“Workers are allowed to elect anybody for as long as they have trust and confidence in that person that he/she will act in their best interests,” Mahlangu adds.

He says for Amplats to take the member component of a board of trustees to the High Court to force it to transfer its assets into a commercial umbrella fund raises a number of questions, concerns and conflicts.

“While it is Amplats, as we understand, which took trustees to Court, we have no doubt that the industry supported them in this case, Old Mutual in particular, as well other interested parties,” he adds.

“The directors of Amplats are simply not members of this fund nor do they carry any risk including investment risk. It is nothing else but paternalism and racist attitudes.”

What did not form part of the chain of evidence was that a whistleblowers report submitted to the Anglo American board – the holding company of Amplats – on the allegations in question, amongst other things, would have supported the allegations of Mark de Klerk’s involvement (also confirmed by various independent sources) and would have stopped the current transaction dead in its tracks and prompted an investigation.

This is despite Amplats stating that, “The whistle-blower report was thoroughly investigated by external lawyers as well as our internal business assurance and legal functions and found to be without foundation,” the company has declined to release it to the media or the board of trustees.

“The report resulting from the investigation of the allegations made by the whistle-blower is a privileged document. We will make no further comment in this regard,” Amplats informed Business Maverick.

“If the matter would have received the right attention from the powers that be, the board of trustees would have been able to now compel Amplats to show them the contracts of the first transfer, which insiders say the platinum miner has refused to do since 2012,” a source close to the matter states.

Emails addressed to the then-AGPF chairperson Dumisa Hlatshwayo by a trustee of the AGPF  at the end of 2018, and more recently emails sent to Old Mutual’s SuperFund PO Fiona Reynolds by other member trustees, that Business Maverick has copies of, seriously question De Klerk’s involvement in previous dealings, yet remain unanswered.

“We must try to solve the allegations of corruption of the ARF/AMRF transfer before doing another one,” one of the letters states.

Lorato Mogaki, head of HR at AngloPlats, also wrote a letter to Old Mutual subsequent to the transfer of the former funds asking how De Klerk was benefiting from the ARF/AMRF section 14 transfers and specifically prohibiting the insurer from employing his services subsequent to any transfers made to the Old Mutual Superfund.

When De Klerk left the employ of AngloPlats (he was not employed by the funds themselves) after the previous transfers and following his removal as PO from AGPF at the request of its members, he opened up his own consultancy called Bullia Consulting.

The company lists its major achievement on its website as: “…we recently managed the transfer of some 20,000 fund members (involving R10-billion in assets) to an umbrella fund – considered the largest move to an umbrella fund in South Africa to date”.

It is worth noting that to date Bullia has had no other clients except Old Mutual and Amplats. In labour circles, this practice is referred to as “throwing a javelin”, essentially delaying a payoff until a later date.

Could it be that de Klerk threw himself a javelin with the assistance of Amplats and Old Mutual at the expense of the disenfranchised miners?

But De Klerk continues to proclaim his innocence.

He confirmed that as part of the job of closing down the old funds, “I do interact with Old Mutual as they are the administrators of some of the old funds but at no time rendered services to Old Mutual, was never employed by Old Mutual nor invoiced Old Mutual for any services through my business.”

Business Maverick asked Amplats’ head of media relations, Jana Marais, to provide some clarity on the matter and she replied via email that De Klerk was employed by Anglo American Platinum in various capacities until 2015.

“De Klerk was not involved or consulted in Anglo American Platinum’s decision to move our employees’ investments in the AGPF to the Old Mutual SuperFund.

“From 2011 until he left our employ, his work was largely focused on the transfer of AMRF and ARF to OMSF,” she said.

She added that De Klerk was retained in a consulting capacity to attend to the liquidation and closure of the AMRF and the ARF.

“As these processes are not yet fully complete, De Klerk remains as the PO on a consulting basis, paid for by Anglo American Platinum. De Klerk also still provides services on the MRR Pension Fund, for which a liquidation application has been submitted.

“He no longer offers support to the management committee (Manco), which performs certain specific functions related to a sub-fund – which comprises all the Anglo American Platinum entities – of the OMSF.

“We have no knowledge of any involvement of De Klerk or his consultancy in any aspect of the AGPF process and have received written assurance from Old Mutual to the same effect.”

That being said, Business Maverick did have their eyes on the cost comparisons supplied by De Klerk for the employer from Old Mutual at the time and posed the question and other allegations made by member trustees to Amplats, to which they replied:

Given the current environment – referring to the COVID-19 restrictions and lock-down- “I’m sure you’ll appreciate that our senior leadership team, legal team and HR are extremely busy at the moment as we prepare to move our operations to care and maintenance.”

We are committed to get back to you as soon as possible. You will appreciate that given the historic nature of the allegations, quite a lot of research is required on our side to ensure we provide you with accurate feedback.”

So, while the clarity that members and the media seek remains out of reach, for now, one thing is certain: the long and curious battle over the Amplats pension fund is far from over. BM