EOH is investigating allegations of irregular financial practices related to its EOH Employee Benefits subsidiary and the Association of Mineworkers and Construction Union (AMCU).
EOH CEO Stephen van Coller confirmed to MyBroadband that an account was opened irregularly for the purpose of segregating funds ahead of the transfer of the AMCU business.
This follows after a source inside EOH told MyBroadband that funds were allegedly transferred from a bank account run by EOH Employee Benefits to an account in the name of an employee.
The funds were allegedly collected for an AMCU funeral scheme, and the transaction allegedly took place after AMCU terminated services with EOH Employee Benefits.
Van Coller told MyBroadband that an account was opened within EOH without permission or authority and that this account held funds destined for the AMCU.
“The account was opened as a segregated account within EOH and had the same signatories as the BU bank account currently,” he said.
“We can, however, confirm that [the employee] did not have the requisite authority as per our new policies to open the said account.”
Funeral scheme proceeds collected
The source further alleged that the account collected service fees charged by AMCU for the funeral scheme, which were possibly illegitimate.
Van Coller told MyBroadband that the account was opened without the required authority, but its purpose was to segregate funds ahead of a final transfer.
“EOH Employee Benefits did not have the requisite mandate and authority for having established this account as per our new policies,” he said.
“However, the reason for opening the account was to segregate the monies pending finalising the transfer of the AMCU business.”
Van Coller added that the service fee charged by AMCU was possibly not legitimate, depending on whether their members had agreed to be charged for this and the licences involved.
“We are of the view that it was not legitimate,” he said. “However, we need further investigation on whether AMCU holds the necessary licenses to have collected same, including whether they had the mandate on behalf of their members.”
He said EOH has not yet received feedback on this investigation.
The matter is being investigated further, van Coller told MyBroadband, and all proceeds from the account, plus interest, have been reimbursed back to AMCU.
MyBroadband reached out to AMCU for comment but did not receive a response by the time of publication.