Investec said it would defend a R4-billion legal claim reportedly being brought against it by the SA Equity Workers Association (Saewa), an affiliate of the Federation of Unions of South Africa (Fedusa), over the alleged handling of investors' pension money by the financial institution.

Sapa quoted Fedusa general secretary Dennis George on Thursday as saying that Investec Employee Benefits, formerly known as Fedsure, had acted unfairly when it invested employee pension money in financial services companies such as the defunct Saambou, leading to heavy losses.

"The pension funds allege that they were told by Fedsure that their funds had been invested in what is called a guaranteed fund of diversified assets suitable for pension fund investments, with reserves being held to smooth out fluctuations in the markets and to ensure the payment of bonuses.

"Instead, the funds claim, Fedsure placed their money together with shareholders' money in a general fund which was then used to invest in financial services companies as part of Fedsure's own strategy," George was reported as saying.

This, according to George, caused the funds to suffer huge losses in value, with serious consequences for the members and pensioners.

Losses reportedly skyrocketed to R4-billion when interest was included.

"As a result of its losses, Fedsure did not declare bonuses to the pension funds in both 2000 and 2001... the year it was acquired by

Investec with the subsequent name change," George said.

A spokesperson for Investec said that 13 cases were instituted against the specialist banker by industrial pension and provident funds in December 2003, of which cases four or five still remained.

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