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Thu Oct 23 05:03:28 SAST 2014

Enoch Godongwana's shock resignation

Philani Nombembe | 16 January, 2012 00:05

The shock resignation of Enoch Godongwana, deputy minister of economic development, was announced yesterday against the backdrop of an inquiry into the disappearance of millions of rands from the SA Clothing and Textile Workers' Union pension fund.

Mac Maharaj, spokesman for the Presidency, said yesterday that Godongwana, had resigned "to pursue personal interests".

Maharaj said Godongwana had informed President Jacob Zuma of "his intention early in December and the President asked him to stay on until mid-January".

Godongwana and his wife, Thandiwe, have been embroiled in a multimillion-rand scandal involving the union.

Thandiwe Godongwana, a director of Canyon Springs, is accused of borrowing R93-million from Trilinear Capital, which manages five provident funds for Sactwu. Much of the cash was paid over by Trilinear before a loan agreement was signed.

Canyon Springs were meant to repay the loan within three years but did not, leaving 15000 Sactwu members without pensions.

Godongwana has maintained that, when he joined Zuma's cabinet in 2009, he resigned from Pan African Benefits Services, Iboma Call Centre and Iboma Properties, beneficiaries of R27-million in loans from Canyon Springs.

In July last year the Sunday Times published information from Canyon Springs bank statements that showed:

  • Enoch Godongwana is listed as a recipient of payments ranging from R132000 to R83000 between December 2007 and August 2008;
  • Thandiwe Godongwana is listed as having received payments ranging from R12000 to R65000 between June 2009 and April 2010; and
  • Former Numsa general-secretary Silumko Nondwangu, who replaced Godongwana at the metal workers' union, received five R40000 payments between June and September 2009.

The Cape High Court granted a provisional liquidation against Canyon Springs last June.

The couple appeared before the inquiry last September and will appear again on January 27.

In December, Richard Kawie, a former union consultant, and Trilinear director Sam Buthelezi were arrested on allegations that they had "embezzled millions of rands linked to the clothing industry".

Kawie appeared before the inquiry in November after both men launched several court actions, apparently to avoid testifying. They spent Christmas in prison as they could not raise the R500000 bail.

On Thursday, Kawie paid R50000 cash and put up his properties in Goodwood, Cape Town and Noordhoek as guarantees for the remaining R450000. Buthelezi, who is expected to appear before the inquiry on January 30, is still in jail.

Tony Canny, the union's counsel, said they would stop at nothing to get him to testify.

"We've already spoken to the police to make an arrangement for him [Buthelezi] to be examined whether it is at Pollsmoor Prison or whether they actually bring him along to the inquiry," said Canny. "We don't think that will prevent us examining him."

At the time of their arrest, police said they had sensitive documentation indicating that Kawie had allegedly committed tax-related fraud of R942838. Buthelezi allegedly siphoned money from an empowerment trust into his account and paid creditors not linked to the group of companies. He is alleged to have stolen R15-million from the trust and its assets. Both men will appear in court in June.

Godongwana said yesterday his resignation had nothing to do with his business interests. "People can have their own opinions about my resignation but in my discussion with the ANC leadership and the Presidency, I did not talk about my business interests.

"It was out of my own assessment that I decided to resign. I realise that my hands would be full of party work this year."

Pressed to elaborate on his "party work'', Godongwana declined.

Zuma said he believed Godongwana's "work experience and expertise will not be entirely lost to the public service but will be utilised elsewhere in the pursuit of the goal of meaningful economic transformation".

In 2008 Godongwana, a former MEC for Economic Affairs in the Eastern Cape, was considered the frontrunner to be deputy finance minister to Pravin Gordhan.

In 2005 Godongwana was embroiled in another scandal when then Eastern Cape premier Nosimo Balindlela announced an inquiry to probe corruption and maladministration in the province.

Godongwana, with former premier Makhenkesi Stofile, Eastern Cape finance, economic development and environmental affairs MEC Mcebisi Jonas and ANC provincial chairman Stone Sizani, were implicated in the findings of the Pillay Commission, chaired by Judge Ronnie Pillay.

In 2009 the four had brought a high court application to have the Pillay findings dismissed.

In May 2009, Judge Dylan Chetty declared the inquiry's findings a "nullity".

Kobus Marais, DA spokesman on Economic Development, said: "It is the right thing to do. We expected the deputy minister to resign a long time ago."

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