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Zvamaida Murwira Senior Reporter
The National Social Security Authority (NSSA) lost more than US$16 million worth of pensioners’ contributions to Interfin Bank after it surrendered title deeds held as security for the now defunct financial institution for unsettled money market maturity instruments.
In her 2012 report released this week, Auditor General Ms Mildred Chiri, said the authority did not receive alternative security in return for the title deeds as the authority said they surrendered the security in “good faith.”

Interfin Banking group collapsed in 2012 and has since been placed under curatorship.

The audit also castigated NSSA for being reckless after the authority was exposed to Capital Bank to the tune of US$57 million in guarantees of loans, money market investments, equity and funds meant for third parties, which the bank diverted to its own use.

On Interfin, Mr Chiri expressed concern that management at NSSA released the security on the mere basis of trust. “On enquiry, management indicated that they released these title deeds on the basis of faith and mutual trust that was placed on the bank by the authority,” read the report.

“In addition, Interfin Bank went on to request for financial assistance of US$157 046 from NSSA to pay for bond registration fees. This was agreed to by NSSA management on January 14 2013. According to management, this amount was to be added to the principal amount that Interfin Bank was already owing to NSSA and this assistance was to be secured by third party cessions.

“This arrangement was entered into with management fully aware that Interfin Bank had been under curatorship since June 12 2012.”
Ms Chiri said the transaction could be indicative of possible fraud involving management at NSSA as evidenced by the release of the bank’s title deeds in anticipation of receipt of inferior security.

In response to the enquiries by the audit, NSSA management said they had noted the observations and the risks highlighted.

“The US$157 046 was paid straight to the conveyancers of the bank upon production of registration fee invoices on February 22 2013.

“The payment was based on a board resolution. The decision to swap cessions with mortgage bonds was a deliberate strategy to obtain better security in case the bank would go into liquidation,” read the response of NSSA management.