News / National
Nssa squandered over US$100 million pensioners' money
23 Feb 2014 at 02:08hrs | Views
The National Social Security Authority (Nssa) has squandered over US$100 million of pensioners' money in bad investments after buying shares in broke companies as well as purchasing properties at inflated prices, Sunday Mail reported.
Part of these investments include the US$50 million injection into troubled Capital Bank, US$2,5 million invested in the now defunct CFX Bank, a staggering US$12 million splashed on overpriced Starafrica shares and US$1,5 million into Africom Continental.
Over US$45 million, which was placed with Interfin, is locked in the financial institution which is under curatorship following an alleged abuse of depositors' funds and high levels of non-performing insider loans amounting to US$60 million.
Nssa general manager Mr James Matiza was not immediately available for comment. Other Nssa funds in banks include FBC Bank US$35 million, ZB Bank US$33,5 million, Metropolitan Bank US$20,5 million, ABC US$19,5 million, Tetrad US$18 million, POSB USS$16 million and NMB US$ 11,2 million, according to a forensic audit by the National Economic Conduct Inspectorate (NECI).
NSSA also lost over US$11,2 million worth of property, which was repossessed by local authorities over non-development.
NECI noted that NSSA also gave "non-profitable" loans to parastatals with some of the beneficiaries, including the National Oil Company of Zimbabwe, getting US$3,1 million, Zesa US$9 million and Cottco receiving US$5 million in November 2009 and another US$3 million in April 2010 at a tenor of 124 days.
The loan attracted a low interest rate of 18 percent per annum. The Grain Marketing Board (GMB) got US$5 million for a flat 2 percent facility fee and 4 percent per annum on a 90-day tenor.
NECI said the highlight of share purchases was the acquisition of 23,27 percent in starafricacorporation. This was the biggest share purchase transaction done by NSSA in US dollar value terms since the advent of the multi-currency system.
A total of US$12 158 842,49 was paid for these shares at 12,5 United States cents per share, raising questions since initial information had suggested that these were bargain shares being offered at around 10 US cents per share.
NECI said records were not availed as to how Mr Matiza suddenly came up with a figure of 12,5 cents per share from the agreed and approved bargain price of 10 US cents per share.
"In simple mathematical terms, Nssa's bid was increased by US$2 455 057,59 in terms of consideration," said the NECI.
The NECI also noted that the price of Dominion Building, commonly known as Chibuku House, was shrouded in controversy since it was not clearly explained why the price increased from US$2,5 mi9llion to US$3 million.
There are also questions over the purchase of Ballantyne Park Shopping Mall after evaluators capped the price tag at US$1,5 million against US$2, 2 million charged by the owners.
The NECI report states, "It should be noted that the owners had sought a sale value of US$2,2 million based on monthly rentals of US$5 665.00 and when INRE evaluated the property, they were given rentals at US$8 353.73 per month, a much higher figure than on the offer letter from Mr Green.
"On the basis of rentals of US$8 353, 73 per month, INRE determined the value of the property at US$ 1 500,000. The figure of US$2 320,000 was only provided as a footnote comment by INRE on the assumption that should Spar occupy some of the shops, per square metre rentals would be US$15 per square metre.
"What should be clear, therefore, is the fact that, Mr Green had over valued his building when at first he gave rentals as US$5 665. Even at the new figure of US$8 353,73 given to the valuers, the asking figure by the Greens was way too high (US$ 2,2 million versus US$ 1,5 million)."
On the purchase of Survey House, it was discovered that the property was bought from Calculus Properties (Private) Limited for US$650 000 against a market valuation of US$600 000.
Some properties are actually idle or non-performing as there is no rent being generated at all and this has prejudiced NSSA in lost rentals and other costs. Some of the properties, which, at some point, were lying idle include Woodlands Apartments, St Tropez Apartments, Snake Park, Dominion House and Survey House, where an accumulative US$650 000 was lost as the properties failed to attract tenants.
NSSA is a statutory corporate body established in terms of the NSSA Act of 1989, Chapter 17:04, to provide social security. Its main mandate is to provide social security schemes for the provision of benefits to all employees.
After collection of contributions, it invests the pooled funds on the share market, money market and real estate.
Part of these investments include the US$50 million injection into troubled Capital Bank, US$2,5 million invested in the now defunct CFX Bank, a staggering US$12 million splashed on overpriced Starafrica shares and US$1,5 million into Africom Continental.
Over US$45 million, which was placed with Interfin, is locked in the financial institution which is under curatorship following an alleged abuse of depositors' funds and high levels of non-performing insider loans amounting to US$60 million.
Nssa general manager Mr James Matiza was not immediately available for comment. Other Nssa funds in banks include FBC Bank US$35 million, ZB Bank US$33,5 million, Metropolitan Bank US$20,5 million, ABC US$19,5 million, Tetrad US$18 million, POSB USS$16 million and NMB US$ 11,2 million, according to a forensic audit by the National Economic Conduct Inspectorate (NECI).
NSSA also lost over US$11,2 million worth of property, which was repossessed by local authorities over non-development.
NECI noted that NSSA also gave "non-profitable" loans to parastatals with some of the beneficiaries, including the National Oil Company of Zimbabwe, getting US$3,1 million, Zesa US$9 million and Cottco receiving US$5 million in November 2009 and another US$3 million in April 2010 at a tenor of 124 days.
The loan attracted a low interest rate of 18 percent per annum. The Grain Marketing Board (GMB) got US$5 million for a flat 2 percent facility fee and 4 percent per annum on a 90-day tenor.
NECI said the highlight of share purchases was the acquisition of 23,27 percent in starafricacorporation. This was the biggest share purchase transaction done by NSSA in US dollar value terms since the advent of the multi-currency system.
A total of US$12 158 842,49 was paid for these shares at 12,5 United States cents per share, raising questions since initial information had suggested that these were bargain shares being offered at around 10 US cents per share.
NECI said records were not availed as to how Mr Matiza suddenly came up with a figure of 12,5 cents per share from the agreed and approved bargain price of 10 US cents per share.
"In simple mathematical terms, Nssa's bid was increased by US$2 455 057,59 in terms of consideration," said the NECI.
The NECI also noted that the price of Dominion Building, commonly known as Chibuku House, was shrouded in controversy since it was not clearly explained why the price increased from US$2,5 mi9llion to US$3 million.
There are also questions over the purchase of Ballantyne Park Shopping Mall after evaluators capped the price tag at US$1,5 million against US$2, 2 million charged by the owners.
The NECI report states, "It should be noted that the owners had sought a sale value of US$2,2 million based on monthly rentals of US$5 665.00 and when INRE evaluated the property, they were given rentals at US$8 353.73 per month, a much higher figure than on the offer letter from Mr Green.
"On the basis of rentals of US$8 353, 73 per month, INRE determined the value of the property at US$ 1 500,000. The figure of US$2 320,000 was only provided as a footnote comment by INRE on the assumption that should Spar occupy some of the shops, per square metre rentals would be US$15 per square metre.
"What should be clear, therefore, is the fact that, Mr Green had over valued his building when at first he gave rentals as US$5 665. Even at the new figure of US$8 353,73 given to the valuers, the asking figure by the Greens was way too high (US$ 2,2 million versus US$ 1,5 million)."
On the purchase of Survey House, it was discovered that the property was bought from Calculus Properties (Private) Limited for US$650 000 against a market valuation of US$600 000.
Some properties are actually idle or non-performing as there is no rent being generated at all and this has prejudiced NSSA in lost rentals and other costs. Some of the properties, which, at some point, were lying idle include Woodlands Apartments, St Tropez Apartments, Snake Park, Dominion House and Survey House, where an accumulative US$650 000 was lost as the properties failed to attract tenants.
NSSA is a statutory corporate body established in terms of the NSSA Act of 1989, Chapter 17:04, to provide social security. Its main mandate is to provide social security schemes for the provision of benefits to all employees.
After collection of contributions, it invests the pooled funds on the share market, money market and real estate.
Source - Sunday Mail
