THE National Social Security Authority (Nssa) has laid the first of a series of civil and criminal charges against top banker and former ReNaissance Merchant Bank boss Patterson Timba who is accused of fraud and theft in excess of US$16 million, forgery and making false statements.
Hazel Ndebele/ Kudzai Kuwaza
Since its appointment in July last year the Nssa board has comprehensively scrutinised the actions of former directors and executives in several of the authority’s portfolio companies.
Documents in the possession of the Zimbabwe Independent show that acting on the basis of comprehensive forensic reports by the Reserve Bank of Zimbabwe (RBZ) on ReNaissance Merchant Bank (and its successor Capital Bank), the authority decided to press civil and criminal charges against some individuals, including the former group chief executive of Capital Bank Patterson Timba.
Nssa holds significant beneficial holding in the now defunct Capital Bank Ltd, which has since applied for liquidation following curatorship.
A letter dated December 2 2016 written by Nssa to the Zimbabwe Republic Police (ZRP) accuses Timba of underhand dealings at the financial institution.
“Nssa wishes to file a formal criminal complaint against Patterson Timba for such crimes inter-alia, fraud and theft in excess of the sum of US$16 million, forgery and making false statements, corruptly using false documents and corruptly concealing a transaction from a principal,” reads the letter written by Nssa chief strategic assets officer Chikuni Mutiswa.
“These actions resulted in ReNaissance Merchant Bank going into curatorship in 2011 and its successor Capital Bank subsequently filing for liquidation in 2013. At present, the known cost to Nssa pensioners is in excess of US$20 million while other depositors collectively lost similarly large amounts.”
Chikuni assured captains of industry at the Employers’ Confederation of Zimbabwe congress last month that Nssa will “rattle cages” to recover millions of dollars lost in investments it had undertaken. This was after employers had complained that Nssa was quick to garnish employers’ accounts if they delayed in paying its contributions while ignoring the millions of dollars bled from the society’s investments.
The RBZ-commissioned forensic report reveals that Capital Bank’s losses were as a result of non-performing insider loans and related party exposures, including gross violations of laws and regulations such as the Banking Act.
Timba could not be reached for comment as his mobile was constantly unavailable however he told a local weekly that Nssa had taken to retribution after he had queried a multi-million dollar transaction in which the compulsory pension fund was selling shares to a Johannesburg stock exchange (JSE)- listed insurance group, Sanlam.
In an interview with the Zimbabwe Independent this week, Nssa board chair Robin Vela said the authority had resolved to take legal action against the defunct bank’s directors.
“Some of these dealings amount to outright fraud and sadly resulted in significant prejudice to pensioners’ interests. Accordingly the board has resolved that the authority proceed to pursue civil suits and file criminal complaints before the Zimbabwe Republic Police Serious Fraud Unit against certain individuals,” Vela said.
“All processes are being taken in concurrence and with the agreement of the minister (of Public Service).
Furthermore, they merely represent the first steps, Nssa’s stakeholders can rest assured that where there are instances of criminal activities which have prejudiced contributors, the board shall leave no stone unturned in ensuring all the perpetrators are brought to justice.”
The audit report revealed that the violation of law included the manipulation of financial records, submission of incorrect financial records and engagement in non-permissible activities through the use of a special purpose vehicle which had not been approved by the registrar of banking institutions.
“The investigation shows that Patterson Timba, who directed the day-to- day operations of Capital Bank in total disregard of regulatory requirements, corporate governance and best practice standards, processed ReNaissance Financial Holdings Ltd (RFHL) payments without the requisite approval of the Bank’s Managing Director and Finance Director,” reads the report.
Timba also owned in excess of the stipulated maximum shareholding in the bank permitted for a single individual and has also been accused of misrepresentation of this shareholding. The shareholding was held through a facade of trusts such as the Bethel Trust (owns 36,88 %) and Duncar Trust (owns 11,25%) which belong to Timba’s family.
“Timba abused depositors’ funds by debiting an overdrawn RFHL call account held at Capital Bank and used the account to pay for loans or expenses not related to RFHL and to siphon depositors’ funds through inappropriately authorised payments to meet other creditors obligations and personal expenses,” the report states.
Furthermore, it is revealed that in 2010, Timba borrowed US$10 million from businessman Jayesh Shah and the loans were purported as cash injections into the bank. The repayments on the borrowed amounts were debited to RHFL account in Capital Bank which was in debit, effectively using depositors’ funds to service the loan and misrepresenting borrowed funds as capital in contravention of Section 75 of the Banking Act.
The forensic report states that under the criminal code, Timba can be convicted for the crimes of fraud, forgery, corruptly using a false document, corruptly concealing a transaction from a principal, and corruptly concealing a personal interest from a principal.