IOL - BUSINESS REPORT / ECONOMY - 13 JANUARY 2021 - 15.44 / AISHAH CASSIEM
CAPE TOWN - CONCERNS have been raised over African Unity Life (AUL) still operating in the industry, even though they have been fined on several occasions, which include in 2011 for R100 000 by the Financial Services Board (FSB), for contravening the Financial Advisory and Intermediary Services Act, and again for R300 000 in 2016 by the Financial Sector Conduct Authority (FSCA).
In 2017 the company was also listed in the Long-Term Insurance Ombudsman list of problematic insurers.
A forensic investigation report has revealed that SA Revenue Service Commissioner Edward Kieswetter was the head of African Unity Life. Photo: Government Communication and Information System
A forensic investigation report that exposed corruption within the Private Security Sector Provident Fund (PSSPF) has revealed that SA Revenue Service (Sars) Commissioner Edward Kieswetter was the head of AUL, just before the investigation was finalised.
Kieswetter, who currently has shares in AUL, was an appointed chairperson of the company’s board during the time the irregularities were made in 2018 and had resigned from the position to take on a new opportunity at Sars.
AUL, the PSSPF and other companies fingered in the report are currently being monitored by the FSCA who confirmed previously that they – the FSCA – initiated regulatory action and ongoing proceedings against certain individuals following the findings made in the report, and could not disclose further information in this regard.
Independent Media’s Investigations Unit last year exposed the PSSPF for various improprieties through a 200 page investigations report conducted by Ngidi Business Advisory, which revealed the irregular appointments of several service providers, board members and the inflation of prices, among others.
AUL, who responded to the report last November, claimed that they were not guilty of any wrongdoing and confirmed that they still served on the fund, but did not reveal the names of their directors to Independent Media at the time of questioning.
While the report revealed that AUL did not have the required B-BBEE level at the time, the company was also found to have participated more than once in the tender process, using different names in order to be appointed by the PSSPF.
This meant that it had compromised the fairness of the procurement process, with their company having an unfair advantage over other service providers that responded to the bid.
AUL was also allowed to increase its offering for the disability benefit to R120 000 during the evaluation phase of the procurement process, which was not allowed, the report confirmed.
A source who alerted Independent Media about Kieswetter’s duties at AUL during the time of the irregularities said: “By the nature of his position, and as chairperson of the company board until his appointment at Sars, Kieswetter should have been aware of the activities conducted by AUL at the time.
“AUL should have also never been appointed by the PSSPF, as they (AUL) have a history of being fined for various transgressions, which is on public record, if even the slightest of due diligences have been conducted by the PSSPF.”
Independent Media contacted Kieswetter through Sars’ media department, questioning him over the matter, but he did not respond.
On January 5, Sars said that Kieswetter was not able to give comment until he returned to the office, after completing his leave. His return date was not made known.
AUL confirmed that Kieswetter is in some way still involved with their company, despite leaving to serve at Sars.
“Kieswetter is a minority shareholder in African Unity Group via his own entity,” but has never been operationally involved during his time at AUL, “only as the chairperson of the board before his appointment as the commissioner of Sars,” AUL said.
AUL did not provide the exact year of Kieswetters appointment and resignation, despite asking twice, and claimed that: “Kieswetter resigned when he was appointed as the commissioner of Sars and ‘before’ the tender of the PSSPF.”
However, according to the Companies and Intellectual Property Commission, Kieswetter was registered as a director of AUL in 2017, but it does not indicate if he had resigned thereafter, while the details of other directors do.
Emails provided in the investigation’s report, which Independent Media hold, indicate that the finalisation of the tender process and commence date for AUL as the chosen service provider was in November 2018, when Kieswetter was already serving on AUL’s board.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER