A COMBINED Central Intelligence Organisation (CIO) and
Office of the President and Cabinet (OPC) investigation into the operations of
National Social Security Authority (NSSA) kicked off in the past week, after it
emerged that the pension fund could have poured millions of dollars into risky
investments.
Some of the funds have flowed into a bank with a history of
fragility.
At one of the banks that have sparked stakeholder outrage,
an official at the Ministry of Public Service, Labour and Social Welfare, a former
minister and a construction firm linked to Reserve Bank of Zimbabwe (RBZ) bank
supervision director, Norman Mataruka, were said to be among beneficiaries of
loans deployed to the market after NSSA had released about $82 million in
Treasury Bills (TBs) in on-lending lifelines.
NSSA is a publicly run pension fund under the stewardship
of the Public Service Ministry, with an asset portfolio of about $1,3 billion,
The accusations are contained in a confidential paper
circulating within the Robin Vela-led NSSA board, which reveals shocking levels
of abuse of pensioners’ savings.
The paper was copied to former public service minister,
Prisca Mupfumira and her successor, Patrick Zhuwao.
One of Zhuwao’s first public acts after his appointment
late last month, was to order the reinstatement of Zimbabwe Congress of Trade
Unions (ZCTU) president Peter Mutasa, to the NSSA board where he sits as a
labour representative.
Mutasa had been dismissed in May 2017 by Mupfumira, who
accused him of leaking confidential board discussions and working against the
institution’s interests.
The Financial Gazette understands that tensions have been
rising at NSSA, with the ZCTU, some board members and executive management
warning that the authority risked sliding back to a culture of poor investments
decisions blamed for wasting the tax payer’s funds.
Reports that authorities quizzed NSSA bosses, soon after
Mupfumira was fired in a shock reshuffle last month, emerged as the
confidential documents obtained by The Financial Gazette indicated that ZCTU
was pressing the authority’s general manager, Elizabeth
Chitiga, to release a
statement relating to investments and loans.
Chitiga turned down ZCTU’s request in September.
She told ZCTU secretary general, Japhet Moyo to attend a
stakeholder meeting “during the 4th quarter of 2017 or the 1st quarter of 2018”
and bring up his issues there.
The ZCTU said on Monday its patience had run out after
pressing for the statements since February.
It said it was considering approaching Parliament to summon
the NSSA executive to explain its investments, or taking legal action to force
it make full disclosures.
This newspaper was also told that there were moves to push
for a forensic audit spanning from 2015, when the new board was appointed, to
date.
“We are forced to write to you after we received no joy
from the NSSA general manager on the above issues (request for information on
the level of exposure for NSSA investment and loans,” ZCTU wrote to Vela last
month.
“The general manager claimed that she cannot engage
individual stakeholders on matters that are in the domain of its board of
directors. The ZCTU notes with concern reports of exposure of NSSA investments
and loans extended to various banks, performance of shares in different
companies and the risks associated.
“You have not adequately furnished us with relevant
information concerning the above on our previous engagements. Market
intelligence provides us with signals to the effect that the investments are
exposed and our constituency which contributes on a monthly basis to NSSA is
being agitated.”
Workers felt NSSA “is slowly abrogating its role of
providing adequate social security while concentrating on investments, some of
them which have become nugatory, sinking millions of dollars. Such information
will assist us to explain some of the issues that our constituency will be
raising,” Moyo added in the October 10, 2017 letter.
NSSA has not responded. “This raises a lot of suspicions,”
Moyo told The Financial Gazette this week.
One of the recent transactions that have triggered concern
at NSSA was the controversial investment in a $5 million low cost housing
scheme in Chinhoyi, according to confidential papers.
The papers said the NSSA board pressed ahead with the
project after ignoring executive advice that it was running into a minefield.
NSSA last year established National Building Society to drive the development
of housing units for workers.
The paper, which has been circulated to Zhuwao and the NSSA
board, claimed the authority was about to abandon the project over issues
related to titles.
NSSA did not respond to queries when approached by The
Financial Gazette this week.
The second deal that some board members, the trade union
and the NSSA executive were said to be querying allegedly involved the
disbursement of millions of dollars to a local bank in on-lending lifelines.
The paper alleged that beneficiaries of the funding at the bank,
which featured on the central bank’s watch list two years ago before its
financial condition improved, were related parties.
The bank’s officials also declined to comment. But Moyo,
the ZCTU secretary general, said the union had queried the funds extended to
the bank when they were still $60 million.
It said it asked Mutaruka to assure the ZCTU that the bank
was stable.
Yesterday, Mutaruka, who is cited in the papers as owning a
company that had benefited from on-lent NSSA funds, confirmed he owns a construction
company but said he had nothing to do with what he called “boardroom wars’’ at
NSSA.
“They (NSSA) must fight their wars alone,” he told The
Financial Gazette.
“Their fights have nothing to do with us. We have been
constructing houses in Glen View without the involvement of NSSA. Send your
questions to the (RBZ) governor so that I can meet him with you because I do
not speak on behalf of the (reserve) bank. We have a standard way of monitoring
and regulating banks. They are saying we must close the bank, but if the bank
had problems in 2008 and 2009, which bank had no problems?” he said.
The Financial Gazette has seen a letter in which the RBZ
director assured the ZCTU that the bank in question was financially sound.
But the confidential paper to Zhuwao and the NSSA board
members casts Mutaruka as an interested party.
“Office of president is already investigating the (money
that) you (Vela) and Mupfumira forced NSSA management to give funds to the
bank” the paper charged.
“You forced Hungwe to do this and the $82 million TBs
‘lending’ and then you and your companies, Mupfumira…and Mataruka of RBZ went
and borrowed these funds from the bank. Maturuka’s building company is
constructing the bank’s houses so he will never act on the bank no matter how
shaky it is,” the paper alleged.
Herbert Hungwe is the chief investments officer at NSSA.
The paper also queries the ouster of former chief strategic
assets officer, Chikuni Mutiswa, and alleges that the executive had fallen out
of favour after he “advised many times against the building society
constructing houses in Chinhoyi because NSSA did not own the land which was
suspect from the very beginning,… and had no titles”.
“For this, he was
called ‘too negative’, then (he was) fired. Now NSSA, via NBS, spent $5 million
there, but is now pulling out,” the paper claimed.
In his interview with The Financial Gazette, Moyo said the
ZCTU would leave no stone unturned.
“We have never been happy with NSSA,” he said. “Our grievances range from (poor) governance to investment.
We had issues with (sacked former NSSA GM) Matiza. Now we have another team and
there are issues. We want to make a tabulation of where they have invested.
Then we will ask them if they have done a thorough analysis on the banks that
they have lent funds. We are aware that the said bank is getting more money
than any other banks but it is in trouble. We hear that the bank funded the
wedding of Mupfumira’s son,” Moyo charged.
“The next step is to write to the Clerk of Parliament to
request Parliament to summon them. If they ignore us, we will approach the
courts and demand that NSSA gives us the documents. We might take legal action
against NSSA. We want the NSSA Act to be reviewed because the minister (of
public service) overrides everyone,” he said. Financial Gazette
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