Elsewhere in this edition, we report that the CBZ Holdings (CBZH) board chairman Elliot Mugamu has been forced to step down from his post in a dramatic twist to the shocking goings-on at the country’s largest bank.
Zimbabwe Independent Comment
Last week, the Zimbabwe Independent exclusively revealed that the National Social Security Authority (Nssa) had besieged CBZH executives demanding to know their remuneration packages and more financial disclosures against the backdrop of paltry dividends to its shareholders. The state-run social security agency — one of the top 20 shareholders in CBZH with just over 10% — is within its rights to demand good corporate, transparency and accountability from the financial institution. For many years, Nssa has come under increasing pressure from pensioners, lawmakers and the public who are all demanding better payouts for long-suffering pensioners. Most pensioners in this country are living in abject poverty, barely surviving on paltry monthly pensions as low as US$60.
Amid this suffering, we have witnessed the obscenely lavish lifestyles of top executives who run companies in which these wretched pensioners are shareholders via Nssa. The scandal stinks to high heaven. We know, of course, that Nssa itself is no saint. Top officials at the social security authority have splurged on luxury cars, fat-cat salaries and excessively generous loans — at the expense of impoverished pensioners. Poor Zimbabweans are toiling day and night in a desperate bid to earn a decent living. It is unacceptable that the pension contributions of law-abiding citizens are now being diverted to fund the lavish lifestyles of fat cats.
Nssa’s newfound activism should not end with CBZH; every company in which the pension authority is invested in has to be held accountable. Zimbabwe’s poverty-stricken pensioners deserve better.
The social security authority, which has 72% of its investments in the equities market, has interests in over 50 companies listed on the Zimbabwe Stock Exchange, holding at least 10% shareholding in 12 counters. It goes without saying that these companies must now begin repaying pensioners for the financial support extended to their enterprises by Nssa. The pay gap between chief executive officers and shop-floor workers has widened alarmingly since dollarisation. One of the greatest tragedies of poor corporate governance in this country is that everyone is obsessed with scrutinising the behaviour of political leaders while conveniently turning a blind eye to captains of commerce and industry. Many companies have been captured by greedy managers and their conniving boards of directors.
Executive remuneration is viewed as an entitlement rather than a reward for commendable performance. Insider loans are particularly toxic, as well-documented examples have shown. Against all moral, legal and ethical considerations, banks are in the despicable habit of making loans to their own officials and directors. Scandalously, the interest rate, repayment terms, and credit evaluation criteria enjoyed by these privileged insiders differs from those applicable to outside borrowers.
Our advice to CBZ Holdings is that sunlight is the best disinfectant. Full disclosure of board fees and executive perks would have spared the company the agony it is currently experiencing. Matters would not have come to this.