Fresh storm over NSSA deals

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 TheFinancial 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 in our possession.

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. The Financial Gazette