NSSA Audit: $37 million TBs rock Metbank and Nssa relations

Report by Constantine Chimakure
A dispute over treasury bills worth US$37 million between the National Social Security Authority (NSSA) and MetBank triggered the financial house to cancel “all transactions” with the authority until courts resolve the matter, a volatile audit reveals.

The NSSA audit carried out by BDO Zimbabwe Chartered Accountants has opened a can of worms, with allegations that the authority could have suffered over US$175 million in both actual and potential financial prejudice in commercial deals it entered with various firms.

Among the companies that entered into the deals with NSSA is the indigenous-owned financial institution,MetBank, which now stands accused of having been unduly favoured by former Public Service, Labour and Social Welfare minister Prisca Mupfumira to get “facilities which were not merited”.

Mupfumira has since been arrested on the strength of the audit and is facing a slew of corruption charges involving US$95 million. She is currently languishing in remand prison on the allegations and battling to secure bail.

According to the audit report, a dispute arose after NSSA gave MetBank treasury bills worth US$62 250 000 in September 2017 on a custodial arrangement.

The bank then pledged US$37 350 000 NSSA treasury bills after authority to use them was granted through a letter written on October 3 2017 by James Chiuta, then strategic assistant executive in the office of then NSSA general manager Elizabeth Chitiga.
Chiuta, according to the audit, had no authority to write the letter, a position MetBank was not aware of. Chiuta was arrested for abuse of office, but acquitted.

NSSA further gave MetBank treasury bills valued US$20 million on a custodial arrangement. The bank later sought and was granted authority by NSSA to use the treasury bills.

“When NSSA discovered that its TBs worth US$37 350 000 had been used by MetBank without getting appropriate authority, they took the matter to court. The other TBs with a face value of US$24,9 million which had not been used by MetBank were returned into NSSA’s custody,” reads the audit report. “MetBank then advised NSSA that henceforth it was freezing all transactions with NSSA until the issue of the US$37 350 000 TBs has been settled by the court.”

MetBank had been granted authority on October 3 2017 to use the treasury bills.

The use of the treasury bills, according the audit, resulted in NSSA failing to recover US$57 350 000 in the treasury bills, US$4 653 796 in loan advances and suspension of two housing projects, which two companies related to the bank were to undertake in Gweru and Chinhoyi until the dispute is resolved by the courts.

According to the audit, MetBank accessed treasury bills and loans totalling US$108 250 000 and repaid US$46 246 204, leaving an outstanding balance of US$62 003 796 which the financial house said it would be prepared to settle once its dispute with NSSA has been resolved by the courts.

The auditors were aware of the pending litigation, but both the officers of NSSA and the auditors ignored the issues raised by the authority and MetBank in their pleadings.

Analysts say the audit report did not contain anything worth investigating or any evidence of criminality.

Mupfumira and former NSSA board chairperson Robin Vela stood accused of having corruptly facilitated the MetBank deals, but the audit report mentioned that the cabinet minister intervened to support the financial house in the spirit of indegenisation, ZimAsset and in pursuit of national housing.

The audit also alleged that another company, Housing Corporation Zimbabwe (HCZ), had prejudiced NSSA of US$16 million it was paid in July 2017 as deposit for construction of 8 000 houses in Caledonia, Harare, in a US$104 million deal.

NSSA has since been ordered to pay HCZ US$30 million with interests for breach of contract after the pension fund cancelled the housing deal.
NSSA had accused HCZ representatives Adam Molai, Stephen Duggan and Alec Nyatanga of swindling the public pension fund of the US$16 million. 
But an independent arbitrator Peter Lloyd ruled in March this year that NSSA had no case against HCZ. He also ruled that the manner in which NSSA handled the matter was wrong hence, they must compensate the property developer US$30 million plus interest and legal fees.
HCZ rushed to the arbitrator after NSSA had terminated the deal alleging that they had failed to construct the 8 000 housing units within the agreed time-frame.
Vela has also threatened a massive lawsuit against NSSA to clear his name.
Efforts to get a comment from MetBank and Public Service minister Sekai Nzenza at the time of publication were in vain.
Nzenza, however, said the audit has paved the way for a new chapter that will see the fund conform to sound corporate governance and transparency.

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