The United National Transport Union (UNTU) yesterday laid charges of fraud, theft and contraventions of the Transnet Pension Fund Act against Bongisizwe Mpondo in this capacity as the Administrator of the Passenger Rail Agency of South Africa (PRASA).

This comes after PRASA admitted to UNTU in writing that the state-owned enterprises has unlawfully withheld pension fund contributions to the value of R23 million that it deducted from the salaries of thousands of employees of Metrorail, a division of PRASA, in February and March 2020.

Steve Harris, General Secretary of UNTU, says the Act is clear that PRASA as the employer, must transfer the contributions to the Transnet Retirement Fund and the PRASA Sub Fund within seven days after the end of a calendar month.

“UNTU received confirmation from the Funds and from PRASA that the contributions have not been paid. PRASA’s excuse it that it is experiencing cashflow problems. This is no excuse to use the hard-earned money of its employee without their knowledge. It is a criminal offence.

“In City Press today PRASA made it clear, the state-owned enterprise may have cashflow problems, but they are by no means bankrupt. Over the past two financial years the Department of Transport saw it fit to take R9 billion from PRASA’s budget to fund the bankrupt South African National Roads Agency (SANRAL),” says Harris.

The unlawful conduct of PRASA came to light after a broker reported to the Union that there was a shortfall on the pension fund contributions of a Metrorail employee who had just retired.

Currently the markets are more than 30% down. This is to the detriment of all pensioners who lives of the interest they earn from their investments. The Metrorail employees on the other hand are still contributing to their pension funds so it means that the Administrators of the funds purchase more shares at a reduced price on their behalf. They will benefit when the markets pick-up, Harris explains.
According to him PRASA is not only withholding the R23 million, but is also benefitting from the interest on the lump sum which must be allocated to the beneficiaries of the funds.

“In 2014, the Pension Funds Act was amended, adding provisions that make controlling shareholders, members of close corporations, company managing directors, trustees and partners personally liable for an employer’s failure to pay contributions. They can be fined up to R10-million or imprisoned for up to 10 years,” says Harris.
But Mpondo and the acting executive managers at PRASA who are assisting him, ignored the Unions repeated warning that criminal charges will be submitted against them if the money is not transferred to the Funds. UNTU represents 49% of employees working for PRASA.

UNTU also submitted formal complaints to the Minister of Public Enterprises Pravin Gordhan to whom the Transnet Retirement Fund Account, the Minister of Transport Fikile Mbalula to whom Mpondo and PRASA accounts, Pension Funds Adjudicator Muvhango Lukhaimane and Advocate Shamila Batohi, National Director of Public Prosecutions (NDPP) to take immediate action to ensure that the R23 million is transferred to the funds.

The case was opened at the Sinoville Police Station in Pretoria under Case Number 127/4/2020.
To confirm the case with the South African Police Service (SAPS) phone Brigadier Mathapelo Peters on 076 065 6502.

For more information phone Harris on 082 566 5516.
Issued on behalf of UNTU by Sonja Carstens, Deputy -General Secretary: Media, Liaison and Communication. For UNTU press releases phone 082 463 6806 or e-mail sonja@untu.co.za

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