'The very affidavit of the General Secretary represents an attack against us as policyholders and our members who belong to 3Sixty Life', say Numsa Eastern Cape members. Photo: Citizen Stock
Tensions are brewing within the ranks of South Africa’s largest union Numsa (National Union of Metalworkers of South Africa).
According to a report by amaBhungane, Numsa boss Irvin Jim and his relationship with Numsa Investment Company (NIC) CEO Khandani Msibi is at the heart of growing discontent at the union.
3Sixty Life, which is owned by the NIC through 3Sixty Global Solutions Group, underwrites life and funeral insurance policies mainly for Doves and Numsa members.
Numsa’s investment holding company, the NIC, is wholly owned and overseen by the union’s National Manufacturing Workers Investment Trust.
The union in effect markets policies to its members, and acts as the policyholder for a compulsory Numsa funeral scheme.
According to the amaBungane report, 3Sixty Life was placed under provisional curatorship in December 2021 after the Reserve Bank’s Prudential Authority (PA) approached the Gauteng High Court on an urgent basis.
The PA is the regulator of financial institutions under the administration of the Reserve Bank.
The PA’s head of banking, insurance and financial markets infrastructure, Suzette Vogelsang, filed an affidavit containing a wide range of allegations, including mismanagement, “inflated directors’ fees” and “unexplained transfers from 3Sixty’s bank accounts to various group entities.
Most concerning are allegations centred around premiums, claims, and complaints from policyholders.
Vogelsang’s affidavit says that 3Sixty Life teams were rejecting certain claims for “illegitimate reasons”.
“The Ombud’s (insurance) office disclosed to the provisional curator that claims worth R1.2 million have not been paid and a significant portion of this dates back to the period prior to curatorship.
“The Ombud’s office is of the view that the bulk of these claims have not been paid because of incompetence at 3Sixty,” reads Vogelsang’s affidavit.
“There has been a steady stream of complaints from policyholders over the years.
“Reports from the Ombudsman for Long-term Insurance for 2019 and 2020 are telling — 3Sixty tops the list of companies which were sent second reminders for having failed to respond or having inadequately responded to complaints.
In 3Sixty’s case, a very high proportion of complaints were found in favour of the complainants.”
Jim and Msibi have vehemently denied that 3Sixty Life had complaints registered.
In his affidavit, Jim writes that, although he has “no knowledge of 3Sixty’s financial position”, and as such “there is no risk to policyholders”.
Jim says that 3Sixty’s ability to continue honouring claims is evidence of this.
The conflict among Numsa leaders was laid bare in a letter written by Numsa National Office Bearer (NOB) Ruth Ntlokotse, after Jim rushed to court in support of 3Sixty management’s attempt to halt the curatorship.
In her letter on 7 February, Ntlokotse alleged that the NOB was in the dark about the curatorship.
The letter further alleges that Jim never shared his court affidavit with the national leadership. “I only got the documents of the application through the court records like any other person,” writes Ntlokotse.
“Since this is a serious matter which involves an investment company that Numsa established through the Trust, Numsa national office bearers should at least have discussed this curatorship or convened a special national office bearer meeting immediately after the court ruling in December 2021 to discuss how Numsa should approach this issue.”
AmaBhungane reported that Ntlokotse is now in hiding over fears for her safety. She is said to have been threatened after dissenting from the position of other leaders.
Several Numsa and NIC members have said they believe the interests of policyholders are at risk, and that Jim appears to have ignored their interests in rushing to Msibi’s side.
The insiders say that if the insurer is facing a solvency crisis, it is Numsa members who hold insurance policies who stand to lose, and curatorship might be their best protection.
The union is divided between loyalists of the general secretary and those who question the role of his ally, Numsa Msibi.
A report by the Electoral Commission of SA earlier in February shows that the company contributed R2-million to three political parties: the ANC, EFF, African Transformation Movement (ATM), Patriotic Alliance (PA) and Good.
Though a seemingly modest sum, the donations from relatively small 3Sixty Health Solutions are on the larger end of the amounts declared. JSE-listed Naspers, for example, donated half that amount.
Health Solutions paid R800 000 to the ANC, R600 000 to the EFF with an additional R150 000 “in-kind” contribution, and R200 000 each to the ATM, which counts Zuma Foundation spokesperson Mzwanele Manyi as a leading figure, and the EFF are regarded as being broadly aligned with RET interests, at least for now.
It is unclear how much, if anything, the NIC group donated to Numsa’s political party, the Socialist Revolutionary Workers Party.
The donations have led some within Numsa to question Msibi’s political intentions.
Making matters worse is the decision to fund politicians at a time when 3Sixty Life is struggling financially and the NIC is failing to repay money it owes to the union.
Numsa spokesperson Phakamile Hlubi told amaBungane that all union office bearers support the application challenging 3Sixty Life’s curatorship.
“It is false for anyone to claim that the General Secretary of the union acted without a mandate of the union,” she said.
“The issue of 3Sixty is one which affects our members and as a union we are deeply concerned. It was correct that the General Secretary depose an affidavit to protect the future of 3Sixty life, and oppose it being placed under curatorship, cognisant of the fact that there are no guarantees that it will not be liquidated if it remains under curatorship.
Hlubi said that the union would not comment on other aspects of the story “until this case has been fully ventilated in court.”
Compiled by Narissa Subramoney
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