Facts behind the sacking of SA union boss

Posted on June 2, 2019


Dennis George, sacked general secretary of South Africa’s Federation of Unions (Fedusa) stood to make a R32 million profit on shares he tried to sell to two of the federation’s affiliates. The shares, in the controversial AYO Technological Solutions group, were offered to the Public Servants Association (PSA) and to the National Union of Leather and Allied Workers (Nulaw), both affiliates of Fedusa.

Ayo shares have featured prominently in the Mpati commission of inquiry into the Public Investment Corporation (PIC) and how and why it funded certain companies. The PIC — it manages n early R2 trillion of public sector workers’ pension funds — paid AYO R4.3 billion for shares sold at R43 each, shares that were sold to George for R1.50.

This is one of the facts that emerged after checking into some of the statements made over recent weeks by George in a series of interviews on radio, television and in print. In them, he consistently maintained that that his involvement with AYO was aimed at benefitting Fedusa affiliates and their members.

But it seems clear that George would have profited hugely had the PSA and Nulaw taken up an offer made, in writing, by him and dated January 16. In a four-page letter extolling the virtue of investment in AYO, he offered the unions the opportunity to each buy 20% of the shares held by Difeme Holdings Group (DHG) “at a 50% discount”. The then prevailing price was R23.50.

George did not reveal that the 11 million shares taken up by DHG, cost just less than R16 million or R1.50 a share. Had the unions taken up his offer it would have cost each of them R24.1 million, leaving George with a profit of more than R32 million while still owning 60% of the shares.

Explaining the transaction in his letters, George wrote: “The R24.1 million will be utilise (sic) to strengthen growth in DHG focusing on buying shares in mining, technology, housing, student accommodation and financial services companies.” 

Also not mentioned is the fact that the purchase price for the shares was provided to George and DHG by 3Laws Capital, an investment company that is part of the group of companies, including AYO, controlled by Iqbal Survé.

Survé, a medical doctor turned businessman and media mogul, is notorious for making false claims about his background and experiences. Among these are that he was Nelson Mandela’s doctor and the “mind coach” to the victorious 1996 Bafana Bafana Afcon soccer squad.

“I am also sure there is something very wrong with one company lending money to another company to buy shares in a linked company” noted a Fedusa official. He had seen one of the share offer letters and was amazed to discover that DHG appeared to be “a one-man band”, linked to Survé.

This was because George wrote that DHG comprises “a skilled and experienced management team that will be doing transactions for the benefit of the Union group shareholders”. This is in line with his frequently stressed claim that DHG was established only in order to “warehouse” AYO shares until Fedusa set up its own investment company.

But, as Fedusa president, Masale Selematsela has also stressed: Fedusa has never made any decision about establishing an investment company. “I kept asking Dennis: who gave this permission? Where are the minutes of any meeting?” says Selematsela.

PSA general manager Ivan Fredericks and his deputy, Tahir Maepa, who both serve on the Fedusa management committee that comprises the leadership of the federation, support this contention. Nonetheless, George became, on social media, what one union official described as a “praise singer for AYO and Iqbal Survé” while continuing to insist that DHG had been set up to “warehouse” AYO shares.

However, it now appears that DHG was in existence well before the controversy over the AYO shares. The company was registered on June 4, 2015, with its place of business being George’s family home in Randburg, sole director, Dennis Henry George (DHG). It was in the process of deregistration when all outstanding R150 per annum fees were paid up in June last year, just one month before DHG received a R1.6 million grant.

The grant, reportedly to “a Fedusa investment company” came from the Lancaster Foundation to “help kickstart a quartz mining and beneficiation hub in the Northern Cape”. The foundation is the non-profit company headed Jayendra Naidoo of the J&J group that has also become embroiled in the Mpati inquiry with regard to a R9.3 billion from the PIC that was invested in the collapsed Steinhoff retail empire.

Naidoo would not comment on “Difeme” or the quartz project, referring all queries to Dennis George. George, in turn, refused last week to answer queries, stating: “I am referring my unfair dismissal to the CCMA (Commission for Conciliation, Mediation and Arbitration) and cannot comment as the matter is sub judicata (sic).

Earlier, in several interviews, he blamed his woes on “white monopoly capital” and “the media” that were opposed to economic transformation. He also noted that he would be “travelling overseas” this month to seek investments in projects that apparently involve “semi-conductors”.

Semi-conductors are essential components in most electronic circuits and high grade quartz can be used in their construction. However, there is currently a glut on the market, the result of surplus productive capacity.

Posted in: Uncategorized