The Food and Allied Workers Union (Fawu), shaken by factional battles and a multimillion rand financial scandal, faces deregistration because of poor corporate governance and alleged mismanagement of membership fees, according to a Mail & Guardian report.

Last month, Fawu, the second largest affiliate in the SA Federation of Trade Unions (Saftu), fired its long-serving general secretary, Katishi Masemola, for misconduct regarding a R19.2m write-off at its investment wing, Basebenzi Investment Group.

Masemola’s dismissal came after two years of behind-the-scenes battles between a faction supporting him and a rival grouping backing Fawu president Atwell Nazo and the acting deputy general secretary, Mayoyo Mngomezulu.

Masemola was also charged with the use of an additional R20m of union funds to pay Basebenzi’s rent and other operational costs. Masemola was served with a notice of dismissal last month after a union inquiry found him guilty of misconduct in connection with the write-offs at Basebenzi, of which he was a director and former acting chief executive officer between 2006 and December 2018.

The report notes that the crisis regarding the union’s finances reached a head in May when the labour relations registrar, Lehlohonolo Molefe, threatened to deregister Fawu or go to the Labour Court to have the union placed under administration.

Fawu had failed to submit its annual financial statement for 2017/2018 and submitted its 2015/2016 statements – for which it received an audit disclaimer – to the registrar only in April 2018. It had also failed to put in place a system of internal controls for more than R73m in membership fees.

Full Mail & Guardian report