[miningmx.com] – TRANSNET’S credit rating will be adjusted downward
almost immediately if the court agrees that its pensioners may bring a class action of
R89bn against the company.
The claim amount will have to be announced with Transnet’s next set of results after
which credit rating agencies may look to adjust the transport giant’s credit rating. The
cost of its loans – it is currently involved in a R300bn major rail and harbour
expansion programme – will therefore rise almost immediately.
“The irony is that the claim would never have been introduced if Transnet and the
National Treasury had not passed a resolution in November 2010 made by the
Portfolio Committee for Public Enterprises that the financial position of the two
Transnet pension funds should be raised with an injection of R1.9bn to correct the
injustices to the funds’ members,’ Freedom Front Plus public enterprises MP Adv.
Anton Alberts said.
Alberts was a member of a joint task team that appointed the portfolio committee to
investigate the issues relating to the financing of the two pension funds.
“The Treasury and Transnet were also represented in the task team and were part of
the decision that R1.9bn should be paid into the funds,’ Alberts said.
The decision was changed into a parliamentary instruction, but when it came to
paying, the Treasury said it did not have the money.
“Brian Molefe, CEO of Transnet, then said Transnet would find the money, but later he
also changed his mind,’ Alberts said. He suggested that a so-called surplus in the fund
at the time should be used to refinance the funds.
“The surplus originated because the pensioners’ pensions had only been adjusted by
2% a year over the past nine years,’ Alberts said. There was no chance that it would
improve the situation in any way.
If Transnet or the Treasury had pushed in the R1.9bn according to the Parliamentary
instruction, the irregularities with the Transnet bonds issued to the fund would
probably also never have come to light.
When Molefe suggested a year ago that the so-called surplus should be used to
finance the funds an association of pensioners in KwaZulu-Natal known as TPAG
(Transnet Pensioners Action Group) realised that the government had no plan for
correcting the pension crisis, says Richard Carr, vice-chairman of TPAG. “We finally
realised a lawsuit would be the only other solution.’
When legal assistance got under way, access was obtained to the annual reports and
minutes of the two funds, the Transnet Second Defined Benefit Fund and the Transport
Pension Fund.
After much analysis it was revealed how the funds were under-financed from the
outset and how the situation was aggravated by alienating the funds from their most
important asset, income-generating Transnet bonds.
The bonds, T011 bonds to the value of R10.394bn, carried a coupon rate of 16%.
This gave the pension funds an income of R1.6bn a year from 1990 when the funds
were established to January 2001 when bonds worth R7.7bn were cancelled and
“exchanged’ for M-Cell shares (later MTN shares) with a market value of R1.395bn. In
the coming class action, it will be argued that this transaction was illegal.
“Transnet thereby saved R1.2bn a year in interest and R7.3bn in repayments. The
fund received no dividends from the M-Cell shares, because the shares are held in a
trust of which the fund was only a beneficiary.
“Inspections of the financial statements are unclear as to whether any dividends were
paid to the two funds’, says a sworn statement by Johan Pretorius, one of the
Transnet pensioners who wish to implement the class action on behalf of the group of
about 90,000 pensioners.
