HomeLocal NewsNssa bosses grilled over CBZ

Nssa bosses grilled over CBZ

White-collar crime investigating unit, the National Economic Conduct Inspectorate (Neci), recently grilled National Social Security Authority (Nssa) directors after they demanded from CBZ Holdings (CBZH) full financial disclosure on executive salaries and insider loans as well as an increase in dividend, it has emerged.

By Bernard Mpofu/Hazel Ndebele

The state-owned social security agency, which owns just over 10% of CBZH issued share capital, has been under pressure from pensioners and lawmakers demanding strong social safety nets.

Ministry of Finance wants Nssa to reduce its exposure on the capital markets and balance its investment portfolio with infrastructure projects and employment creation to help offset an underperforming economy.

Nssa has been demanding to know CBZH executives’ remuneration packages and more financial disclosures against the backdrop of paltry dividends to its shareholders.

Government sources told the Zimbabwe Independent that following intensified pressure from Nssa, Neci officials questioned Nssa directors’ motive for grilling CBZ officials. Government is the largest shareholder in CBZ and sources say the bank also handles sensitive accounts for state agencies, including the intelligence services; hence the panic.

Sources say Nssa was accused of seeking to destabilise CBZ Bank, although this was dismissed as untrue. Nssa says it is adressing corporate governance issues and interests of pensioners.

“In the aftermath of the December events, Nssa bosses were grilled by Neci officials over this issue as there were claims that the pension authority wanted to destabilise the bank. Initially the two line ministers were fighting from different corners, but this has since been resolved,” a source said.

Nssa chairman Robin Vela confirmed that they were interviewed by Neci. “It is true that we were interviewed in relation to our engagement on CBZ and also on claims by some people with vested interests that Nssa was trying to destabilise the bank,” Vela said. “We were suprised by that and then enquired as to whom the complainant was, asking for a written request for the information they wanted. That was the end of the matter.”

Last month, Finance minister Patrick Chinamasa and his Public Service, Labour and Social Welfare counterpart Prisca Mupfumira threw their weight behind Nssa’s bid to hold CBZ Bank executives accountable over their fat-cat salaries and exortionate perks.

A series of meetings have been held on the issue. It has been agreed by the shareholders that the CBZ executive perks were not above board and therefore changes had to be made in the interest of the shareholders, as well as pensioners who get a paltry US$60 per month.

The shareholders, who include Nssa, also agreed that it was best not to take the route of an Extraordinary General Meeting (EGM), which would be very public; instead it was agreed that certain resolutions such as the retirement of the CBZ board chair be taken.

It has also resolved that quarterly fees for the board chair should be capped at a maximum of US$6 000 and that ordinary board member fees should not exceed US$4 200 per quarter. Non-executive chairman Elliot Mugamu, who has since been forced out, received executive perks from the bank in addition to board fees. Between January and December 2, he received perks to the tune of US$18 902,35 which included medical aid, security guards, fuel and other motor vehicle expenses, wi-fi, newspapers and DStv annual subscription.

It has further been resolved that the sitting fees for the board chair should not exceed US$800 per sitting and that ordinary sitting board member fees should not exceed US$650.

CBZH has announced an annual dividend of US$3,2 million after releasing its financials for the year ending December 31 2016. Official figures from the Reserve Bank of Zimbabwe show that the banking sector remained profitable during the year-ended December 31 2016, with an aggregate net profit of US$181,06 million, an increase of 42,36% from US$127,47 million reported for the corresponding period in 2015.

All operating banking institutions, according to the central bank, recorded profits during the period ended December 31 2016.

“I write as a representative of Nssa, a shareholder of CBZ Holdings Limited (“CBZ”) with in excess of a 10%, shareholding entitling us to call for an Extraordinary General Meeting (EGM) to seek clarification on certain matters relating to CBZ, and in this particular instance the independence of your board of directors (in particular, the group chairman, as required under the new Banking Act) and the remuneration policy for both management and the board of directors,” Vela wrote in a letter dated November 25, which was addressed to CBZH secretary Rumbidzayi Jakanani.

“It has been brought to my attention that it may be the case that your non-executive group chairman earns in the region of US$40 000 per quarter from CBZ.

“It has also been brought to my attention that the same chairman has had a Mercedes-Benz vehicle purchased for him by CBZ. Both of these are unconscionable for an authority which has received minimal returns in the form of dividend from CBZH.

“I also do not believe there has been full or adequate disclosure, in general, around the remuneration framework and packages for senior management and the board. It is also not clear what hidden benefits in kind, per diems and other are paid.

“At the core of our concerns is how any individual(s) can remain independent, give strategic oversight, if they are wholly financially dependent on CBZ. We make the broad assumption that the board, which is responsible for all aspects of CBZ, is fully aware of all detailed elements relating to these matters, takes collective responsibility and consciously duly resolved/approved the same.”

Jakanani responded to Vela saying following his letter, the CBZH board convened on December 1 2016 and deliberated on issues raised by Nssa.

Recent Posts

Stories you will enjoy

Recommended reading


Comments are closed.