NSSA investment manager, Richard Fusire, has been fired for
ill-advice which resulted in the multi-billion State-run pension entity
financing a high-risk financial institution to the tune of US$6 million.
He was also accused of authorising the payment of over
US$1,4 million in a housing project deal without following the authority’s
proper investment market analysis.
Fusire who was employed as an investment analyst, acted
contrary to the NSSA risk policy and sanctioned investments of US$6 million
with the Metbank that did not meet the authority’s criteria because its credit
rating was despicable.
The investments into Metbank were against the NSSA risk
policy as the authority’s investments committee’s Counter Party Limits Report –
a bank credit rating analysis report which details the evaluation of the
creditworthiness of counter party financial institutions – graded Metbank as a
high-risk financial institution and recommended against any future transactions
with it due to its failure to meet the credit criteria required by the
authority.
Despite the risk, Fusire advised the authority and entered
into a loan facility agreement with Metbank resulting in the authority
extending the US$6 million to the bank.
Fusire also authorised payment of US$1 413 767,47 for the
Brundish Chinhoyi housing project, which to date has not commenced.
He recommended the payment of the money to National
Building Society (NBS) for the housing project when there was no written
agreement with the development partner nor had security been provided contrary
to the project loans procedure and to his duties as an investment money market
analyst.
For making the wrong decisions, which exposed the authority
to potential prejudice, Fusire was hauled before a disciplinary authority
charged with two counts of misconduct.
Advocate Lewis Uriri presided over the disciplinary hearing
and convicted Fusire after a fully contested labour hearing, before
recommending his dismissal. In his defence Fusire argued that the board
authorised the investment on November 23, 2016, saying the draw-down request
brought by NBS through the Strategic Asset Investments Division, was based upon
authorisation by the board and it had been signed by signed and confirmed by
one Herbert Hungwe, who at that time was also heading the Strategic Assets
Investments Division.
It was also his evidence that his involvement only came
when processing payment and he did so on the basis of the term sheet and also
the resolution of the board, which documents were tendered as evidence.
On the Metbank and Metro Realty transactions it was
Fusire’s defence that they were not within his purview, but rather that the
agreements were concluded by the property investments division.
Furthermore, he stated that the authority had already been
notified of the risk attached with investing with Metbank by the Counter Party
Limit Report of October 2016-April 30, 2017.
In addition to that, Fusire stated that the board through
the involvement of the Minister had granted a Special Dispensation and Facility
to the bank.
Therefore, disbursements to the bank where authorised by
the Special Grant and the loan facility to the bank were secured by treasury
bills.
But Advocate Uriri ruled that Fusire worked against company
policy, saying it was a serious act of misconduct for an employee to
deliberately act against the employer’s policies to advance personal interests.
He found that NSSA is a public institution and Fusire was
employed to safeguard the public interest in respect of the employer’s
investment portfolio, but he abdicated this responsibility.
His conduct constituted gross misconduct.
“Most importantly sight must not be lost on the fact that
public funds are involved and any prejudice to the NSSA has a direct impact on
the livelihoods of the poor public whose money it is supposed to safeguard,”
said Adv Uriri.
The lawyer underscored the critical role of Fusire’s
position in which he found dismissal as the penalty appropriate in the
circumstances of the case.
“In the result the employee is discharged from his
employment with effect from the date of his suspension,” he said.
The charges against Fusire arose in 2017, when NSSA sought
to develop its land in Chinhoyi through financing its subsidiary National
Building Society, which was earmarked the two-phased construction of 723 low
cost housing units.
The total costs of this facility was US$15 523 000 as affirmed
in the loan agreement between the two parties in May 2017.
The parties earlier on had signed a term sheet which
essentially was a guide as to the terms which had to be satisfied before any
substantial financial agreement was to be finalised.
Two years later in March 2019 there was a draw-down request
of the amount of US$1 413 767,47 from
NBS on the strength of the term sheet signed on February 8 2017 between the
parties.
A payment of US$1 413 767,47 was made on March 31 2017 at
the recommendation of Fusire and subsequently approved by Mr Hungwe his
immediate supervisor on the previous day.
This was after an Investments Procurement Committee passed
a resolution, which resolved that an amount of US$15,5 million be allocated to
NBS for the Chinhoyi project.
The amount was to be disbursed in stages.
An internal audit was then conducted by NSSA internal auditors who discovered that the
transactions with Metbank and Met Realty were riddled with various procedural
breaches which contravened NSSA regulations. Herald
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