HomeBusiness DigestCAI pension fund boss quits amid audit storm

CAI pension fund boss quits amid audit storm

THE Communications and Allied Industries Pension Fund chief executive, John Mashika, has resigned from the entity amid an internal audit report published in 2016 which revealed irregular investment transactions during his tenure, among other problems, businessdigest can reveal.

By Tinashe Kairiza

According to the internal audit report seen by businessdigest, the pension fund could have been prejudiced about US$3,2 million when Mashika unilaterally sanctioned the acquisition of a number of properties against the entity’s investment procedures.

Mashika, who in 2015 joined the pension fund which has a property investment portfolio that includes Kopje Plaza, Causeway Building and Runhare House, approved the acquisition of Hopley-Southview Park and Tynwald land banks without following proper procedures. With an investment portfolio consisting of about 30 properties around the country, it is one of the biggest pension funds in Zimbabwe by asset value.

Communications and Allied Industries Pension Fund board chairman Celestino Gavhera confirmed the departure of Mashika who had been with the entity for nearly three years.

“He (Mashika) resigned. His contract expired on the 30th of April and he decided to resign,” said Gavhera, without elaborating on the circumstances surrounding the former chief executive officer’s exit.

Mashika did not respond to questions sent to him to explain the circumstances surrounding his departure. This is despite receiving the questions.

In prior communication with him two weeks ago, he commented on the audit.

“I presented the matter to Zacc and they dealt with it in January to their satisfaction,” he said.

The report, compiled by the audit manager, sought to determine the risks associated with key investment projects the fund undertook, which include the acquisition of the Hopley-Southview Park, Tynwald land banks, as well as the renovation of the Harare Central Sorting Offices (HCSO) complex.

According to the audit report, “though pre-investment risk evaluation by management was done as related largely to the land development proposals, operational or execution risks were not properly addressed.”

Sources closer to the developments say Mashika had finally succumbed to pressure after the Zimbabwe Anti-Corruption Commission (Zacc) launched an investigation into the investment decisions of the entity during his tenure. Zacc is investigating the matter under file number: 65/02/18.

According to the audit report, an assessment following the purchase of the Tynwald land reveals that Mashika unilaterally approved the project investment without approval from the investments committee chairperson.
“A further audit report follow up on the issue revealed that a price of US$3,2 million was finally agreed with Zimre Property Investments Ltd (ZPI) as the selling agent,” the audit report says.

“However, audit noted with concern that the final price negotiations appeared to have been done by the chief executive officer alone at the exclusion of other managers.”

The report recommended that Mashika “should be taken to task to explain his indulgence in transactions with a former sister company ZPI in the light of the arising conflict of interest.”

The audit report also unearthed massive irregularities surrounding the decision to renovate the Harare Central Sorting Offices.

“Audit noted that the set up on the ground was contrary to what the Investments Committee had been apprised of in a recent Investments Committee meeting IC02/2016,where the CEO pointed to the existence of a Managing Committee, when in fact it was non-existent,” it says.

Sources close to the developments said that the Insurance and Pensions Commission was also launching an audit of its own centred on how the fund was being administered during Mashika’s time at the helm.

The fund was formed in 1970 for the purpose of providing retirement benefits for former officers and employees of the participating communication and allied industries on their retirement.

The fund’s investment portfolio ranges from real estate to the money market.

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