Court orders pension fund boss who ‘worked from home’ to repay his salary

The former chairperson and CEO of the South African Local Authorities Pension Fund has been ordered to repay R270,000 he was paid for two months while he did no work.

And a bid by Bongani Cyprian Maphanga to get R13.2m from the fund, which he said was owed to him until he retired, in terms of what he claimed was his “indefinite” CEO contract, has been rejected by Pietermaritzburg high court judge Jacqui Henriques.

Maphanga was employed by the Msunduzi municipality when he became a member of the fund, making him eligible to be nominated as a trustee.

He served on provincial structures until 2000 when he was elected onto the national board of trustees. He had oversight on finance and investments and was responsible for a turnaround strategy to increase funding.

When his terms of office came to end, with the expiry of the board in 2006, the newly constituted board elected him as chairperson.

At that time, he was still employed by the municipality and served on a part-time basis. A decision was taken to employ him on a full-time basis, and the fund reimbursed the municipality for his salary.

His evidence was contrived and self-serving.

—  Judge Jacqui Henriques

When he was again elected chairperson in 2011, the municipality was under administration and it refused to continue with the arrangement.

The fund then amended its rules and created for him a dual position of chairperson and CEO, with remuneration of about R1.2m a year.

When the board’s term lapsed in 2016, elections did not take place timeously and the Financial Services Board appointed an administrator, who continued to pay Maphanga in  August and September that year.

Maphanga, in the application brought by the fund for the return of this money, which was heard by judge Henriques, claimed he had worked “from home” during those months and was entitled to his salary.

Further, he said, his contract as CEO — as distinct from his role as chairperson — was “indefinite”, and he was entitled to his R1.2m annual salary until he retired.

The fund, he claimed, had terminated this contract without cause.

But Henriques, in her recent ruling, found against him.

She said he could not provide any proof of the work he had done in August and September, and there was contradictory evidence to his claims that people, including him, could work from home and not at the fund’s offices in Sandton.

“He did not impress me as a witness. During cross-examination, he was extremely antagonistic and uncooperative and reluctant to answer questions and propositions put to him,” she said.

“His evidence was contrived and self-serving.”

For example, she said, he claimed that he had not attended meetings of the interim board because he had not been invited.

He could not provide any proof of the work done when he testified that he tendered his services in August and September.

The judge said his appointment as both chairperson and CEO were for a fixed period “aligned to the term of office of the board of trustees”.

“It was never envisaged that he would be employed on a permanent basis,” she said.

“He did not perform any work, and he did not report to the head office to tender his work.”

The judge ordered that he repay the R270,000 plus interest and dismissed his counterclaim.