HomeBusiness DigestNSSA recalls execs from investee boards...overhaul gathers pace

NSSA recalls execs from investee boards…overhaul gathers pace

ZIMBABWE’S social security agency has withdrawn its executives from company boards in which it has interests in as the new board overhauls the institution to rid of legacy issues and restore ownership of the authority to contributors and pensioners, chairman Robin Vela said on Wednesday.

The National Social Security Agency has been dogged by related party and governance issues that have affected the authority’s cashflows and eroded public and investor confidence.

The new board this week fired its general manager James Matiza together with several other executives as part of its restructuring exercise. The exercise, Vela said would lower operating costs, improve service delivery, accountability and deliver a higher return on earned contributions.

NSSA, which has 70% of its investments in the equities market, has interests in 53 of the 59 actively listed companies on the Zimbabwe Stock Exchange, holding at least 10 percent shareholding in 12 counters.

“The board recognises the need to refocus NSSA; seeks a fresh start and return ownership of the authority to contributors and pensioners; (and this) starts by relieving senior management of their duties,” Vela said.

“NSSA will take the lead as an active shareholder and change the culture of investee company boards and management teams who have a historic tendency to dilute long term, long suffering, loyal shareholders such as NSSA upon the first promise of new capital albeit at a deep discount to market value let alone net asset value. To enable boards to be accountable, executives of NSSA have been withdrawn from investee companies. They are to focus on NSSA business exclusively.”

NSSA

NSSA which has been at loggerheads with lawmakers and government officials over its investment portfolio has in the past been rocked by poor corporate governance issues.

The National Social Security Authority (NSSA) has in recent times come under fire from hard-hit pensioners and lawmakers who felt that payouts were below the poverty datum line despite investment by the authority in ailing banks and the equities market.

“The board is concerned about this historic investment performance, both in terms of capital loss and the lack of market related investment income. There is recognition that capital must be protected at all costs and there must be a marked improvement in the investment income so that the funds under management can grow with investment income utilized to meet curre fund liabilities, principally to pensioners and potentially have the capacity to then increase payments to a “living pension” level,” Vela said.

“NSSA will, going forward be transparent about and engage our stakeholders on how, where and why the authority has invested their funds. The board is clear, it can no longer be business as usual…”

The company is set to open its micro-finance bank as part of its restructuring exercise. The plan came two years after sinking and losing US$50 million of pensioners’ funds in a botched attempt to rescue Patterson Timba’s Renaissance Merchant Bank (RMB).

Despite attempts to save RMB, including rebranding the bank to Capital Bank with the hope of distancing the entity from mismanagement and abuse of depositor’s funds, the bank went under in 2014 with millions of Nssa’s funds.

The Capital Bank case is just but one of NSSA’S questionable banking investments.

NSSA also lost about US$16 million in other banks that have been shut down. It had US$15 million deposited with Interfin Banking Corporation, which closed down in 2012 after gross abuse of depositors’ funds was unearthed.

The authority also owned 10,02% of Interfin Financial Services, the parent company of Interfin Banking Corporation.
NSSA had more than US$750 000 in Genesis Bank, which collapsed in 2012.-Staff Writer

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