Nssa fingered in Fidelity Life chaos

via Nssa fingered in Fidelity Life chaos – DailyNews Live 7 December 2015

HARARE – The National Social Security Authority (Nssa) has been fingered in yet more alleged corporate malpractices, this time at the previously stable insurance provider Fidelity Life Assurance of Zimbabwe (Fidelity), which is on the verge of imploding.

Well-placed sources told the Daily News at the weekend that the statutory social security body was “inexplicably” ganging up with Fidelity’s management to remove the insurers’ board which had unearthed a number of alleged irregularities in insider loans and unapproved executive remuneration running into tens of thousands of dollars over the past few months.

“Something stinks to high heaven here. It cannot be right that Nssa should be protecting and encouraging Fidelity’s management to destroy the company, including shareholders’ and policy holders’ value.

“The fact of the matter is that there has for a long time been very poor corporate governance in the company, that is until the current competent board was put into place, and which has worked hard to oversee the work of the management team.

“Sadly, our top executives, who for long were used to acting with impugnity, don’t like this and are now working in cahoots with the new leaders at Nssa to remove this board. It’s a tragedy,” one of the concerned insiders said, calling for a forensic audit into the affairs of Fidelity.

Fidelity used to be a subsidiary of Zimre Holdings until the latter lost its majority shareholding in the company to Nssa in a rights issue.

“This board that Nssa inexplicably wants out has kept a watchful eye on management’s performance and behaviour, and has ensured that shareholders’ and policyholders’ interests are protected.

“It will be a tragedy of monumental proportions if this Nssa madness is not stopped by among others the Insurance and Pensions Commission and the Securities Exchange Commission,” the whistle blower said.

The well-placed source said Fidelity’s board of directors, which is chaired by the highly-regarded and retired banker, Lawrence Tamayi, had instituted a number of much-needed corporate governance measures at the company, aimed at improving both board and management accountability.

“The board was clear that the Zimre legacy in terms of weak corporate governance could not be allowed to carry on, and hence its drive to redirect the business on the right path.

“It would appear that this drive has not gone down well, particularly with the CEO Simon Chapereka,” the source said, giving examples of Fidelity’s poor corporate governance which the board had rectified that included the alleged unearthing of unauthorised loans to Chapereka in the form of insider loans from subsidiary companies, the amassing of properties in the form of stands without executives making any repayments, and executives paying themselves board fees in addition to their salaries.

Apparently, Chapereka was also a member of both the company’s audit and human resources and nomination committees for many years, giving him significant powers to not only make board appointments, but also to award himself “irregular” payments and benefits.

“All this has been rectified by the board. Staff were also always under threat until recently, with a number of senior managers being fired left, right and centre for no good reason, as those at the top engaged in illegal dealings including amassing shares and colluding with suppliers.

“Our fear is that the push to kick out key members of the board, including the chairman, is a sinister ploy to tilt the ship backwards, and the motives of Nssa’s acting general manager, Hashmon Matemera, in all this are at best very unclear,” the source added.

The National Economic Conduct Inspectorate is currently looking into the circumstances surrounding the Zimre takeover, with some Nssa executives and directors under the spotlight.

Efforts to get a comment from Nssa, Fidelity and Chapereka  were unsuccessful last night.