Fedusa acts against Dennis George over his acquisition of Ayo shares
The general secretary of Fedusa is accused of acquiring the shares through his company, Difeme, which received pre-listing Ayo shares at R1.50 compared with the R43 a share paid by the PIC
Union federation Fedusa has placed its embattled general secretary, Dennis George, on special leave pending an investigation into allegations of corruption and that he received shares from controversial IT services company Ayo.
Recent media reports accused George, who is also a nonexecutive director of Ayo, of acquiring the shares through his company, Difeme Holdings, which received pre-listing Ayo shares at R1.50, a pittance in comparison to the R43 a share paid by the Public Investment Corporation (PIC).
The PIC invests funds on behalf of the Government Employees Pension Fund.
Its investment in Ayo has come under serious scrutiny at the judicial commission of inquiry into the PIC.
The Sunday Times has also reported that Ayo’s owner, Iqbal Surve, withheld key information from the corporation before the PIC made the critical decision to invest R4.3bn of government pension money.
On Wednesday, the management committee of Fedusa told reporters that George had acted in his personal capacity and he was not authorised to represent Fedusa during the dealings.
“The attempt to link Fedusa to Difeme Holdings, a company associated with the general secretary of the federation in his personal and independent capacity is incorrect as the two entities have absolutely nothing to do with each other,” said Fedusa president Godfrey Selematsela.
In a report compiled by a task team looking into the matter at Fedusa and seen by Business Day, the federation was concerned about a possible conflict of interest between George’s position as general secretary of Fedusa and being a nonexecutive director of Ayo.
Although George was appointed at Ayo in August 2018, it appears he failed to declare this to Fedusa.
The report states that it was only after Selematsela “confronted” George after the news had appeared in the media that he indicated his “intention” to declare his directorship at a November 2018 meeting.
However, even then, George did not declare that he had acquired shares in the company.
The federation resolved to place him on suspension on February 1 until internal investigations into his conduct are completed. The federation said it expects the investigation to be completed by February 26.
The terms of reference for the investigation include questions as to whether Fedusa has any shares in Ayo Technology Solutions and whether there is a possible conflict of interest by the general secretary.
George recently pleaded his innocence in the media, saying the reports about his involvement in Ayo were “full of lies”.
Meanwhile the South African Clothing and Textile Workers’ Union (Sactwu) — which has also been implicated in the Ayo debacle — said it accepted the offer for the Ayo shares understanding that it was a discount share price offered to BEE organisations.
Speaking to a local radio station on Tuesday, Sactwu general secretary Andre Kriel said the share deal was not secret and the offer had been made publicly.