More than R100 million in pension funds belonging to electrical engineers across the country appear to be in peril as a result of a criminal case against the flamboyant self-proclaimed preacher Shepherd Bushiri.
At least four other pension funds that were invested in Bushiri’s operations, to the tune of R100 million, are also waiting to be cashed out.
Bushiri, who is originally from Malawi, is the head of the Enlightened Christian Gathering church. He and his wife, Mary, were arrested earlier this year on charges of fraud and money laundering.
He reportedly owns a string of luxury vehicles, including a Maserati he allegedly bought for his daughter on her sixth birthday in 2017.
Authorities have seized his assets, putting the Electrical Contracting Industry Pension Fund in a tough spot.
According to a letter from the trustees to members, the fund invested R110 million in Bushiri’s Sparkling Waters Hotel development in 2017 via fund manager JM Busha Investment Group.
It was at this hotel, which is in Rustenburg, North West, that Bushiri was arrested last year.
The initial investment period was for a year, which was later extended for another year.
When its investment strategy changed at the end of last year, the fund wanted to withdraw its money, which had grown to R140 million. However, as a result of the attachment of Bushiri’s assets by authorities, the money was not accessible.
JM Busha has so far been able to repay only about R37 million.
The trustees allege that JM Busha exceeded the mandate by investing in Bushiri’s property, and have lodged a complaint with the Financial Sector Conduct Authority (FSCA).
They have also initiated legal steps to claim the money from Bushiri.
JM Busha CEO Joseph Busha, who is the president of the Zimbabwean political party FreeZim Congress, denies any wrongdoing on his part.
He claims to have been transparent about the investment and says that he even sent daily reports to the fund.
He also claims to have been especially careful, and says that he received security of R400 million from Bushiri to guarantee the investment.
Busha said he had already obtained a court order to attach Bushiri’s assets to reclaim the pension fund money.
According to the fund manager, this was his first time investing with Bushiri. He says that he did not know the prophet prior to investing in the project.
Busha also says he selected the project on its merits, following a presentation to his investment firm.
The investment performed so well that the trustees extended it after one year.
According to Busha, things got problematic when Bushiri’s assets were frozen by authorities. He says the present situation is the unintended consequence of the authorities actions.
According to the FSCA, investigations into Busha have shown that four other pension funds are awaiting money that was invested with Bushiri.
The Engineering Industries Pension Fund is owed R27 million, the Metals Industry Pension Fund is owed R21 million and two SA Municipal Workers Union (Samwu) funds are owed R42 million and R7 million, the FSCA said.
On behalf of the Samwu funds, Busha also invested R60 million in the SME Bank Namibia, which is currently being liquidated.
According to the FSCA, no complaints were submitted against JM Busha by these funds.
The authority initially suspended Busha’s licence, but after he gave an undertaking that the money would be repaid, his licence was restored, albeit with additional oversight and reporting obligations.
In the meantime, trade union Solidarity said it was investigating the allegations on behalf of its members.