27 September 2022
Funeral insurer 3SixtyLife, ultimately owned by the investment trust of the National Union of Metalworkers of SA (NUMSA) is still under curatorship and its future hangs in the balance. Image generated by Stable Diffusion (Public domain)
The fate of the funeral insurance company which prompted a bitter fight among executives of the National Union of Metalworkers (NUMSA) is still hanging in the balance, six months since the matter was heard in court.
After two years of operating in a state of insolvency, 3SixtyLife, was placed under curatorship in December 2021 at the request of the Prudential Authority. The Prudential Authority is a regulatory body which operates under the auspices of the South African Reserve Bank.
On 22 March, Judge Fiona Dippenaar in the Johannesburg High Court heard arguments between the Prudential Authority and the erstwhile directors of the company, as well as Yashoda Ram, the court-appointed interim curator, about whether the interim curatorship should be made final.
Six months later, Judge Dippenaar is yet to rule on whether or not the curatorship should be lifted. 3Sixty Life is ultimately owned by NUMSA’s investment trust, and its immediate parent company is Doves, the funeral provider.
GroundUp has previously reported on the circumstances that led to the curatorship, the battle between regulators and 3Sixty Group’s directors, and the strange about turn by the interim curator Yashoda Ram. We have also reported on the consequences that followed the curatorship saga: how NUMSA’s national congress was thrown into disarray after union leaders who raised concerns about 3SixtyLife were suspended.
In April, Ram tried to resign as curator and hand the curatorships over to management and the board of directors. When this was blocked by the Prudential Authority, she argued in two affidavits submitted to the Johannesburg High Court in May and June that 3Sixty Life should no longer remain under curatorship, as it was “solvent”.
But in an affidavit filed in response to Ram, also in June, the Prudential Authority disputed Ram’s claim that 3Sixty Life was solvent. They presented data from 3Sixty Life’s unaudited management accounts between January and April 2022 which show that the company remains in a perilous position, with assets exceeding liabilities by just R35-million in April. (The Prudential Authority does not wholly trust the accuracy of management accounts as they have not been examined by an independent auditor).
Across all four months, the company’s minimum capital requirement and solvency capital requirement ratios remain well below the minimum required ratio as defined by the Insurance Act. Furthermore, the audited financial statements for 2020 and 2021 are still outstanding.
The Prudential Authority also said in the court papers that Ram had failed to provide them with information about the state of the company, and had blocked her former colleagues at BDO from working with her.
On 20 June, Khandani Msibi, the boss of NUMSA’s investment company and acting chief executive of 3Sixty Life, applied to the court to have the information regarding 3Sixty Life’s solvency, provided by the Prudential Authority in their response to Ram’s claims, struck from the record. Msibi claimed in court papers this information amounted to the introduction of new evidence. He said the Prudential Authority would “stop at nothing” to continue the curatorship.
Msibi, according to an article in The Star, says that 3Sixty Life is the victim of a conspiracy: “it is all white-owned insurance companies colluding and, of course, colluding against black insurance companies – add to that the unfair treatment of black insurance companies by the regulators …”.
The author of that article, Siyabonga Sithole, writes that, “There have been indications that the South African Reserve Bank through the PA is targeting black-owned companies.”
IOL has been publishing a few defences of Msibi, including this, by The Star’s editor Sifiso Mahlangu (formerly of ANN7), and this editorial.
On 14 September, the Constantia Insurance Company Limited (CICL) was placed under final liquidation, after being placed under curatorship in July 2022. It had been operating in an insolvent position since mid-2019. CICL is owned by Conduit Capital, which is chaired by a white man, and whose CEO (also the CEO of CICL) is also a white man.