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Takunda Maodza, Harare Bureau
THE National Social Security Authority bought a Harare property for a price inflated by more than $8 million in yet another investment boob at the pension fund bordering on corruption, it has emerged.

Documents in possession of our Harare Bureau from an audit conducted at NSSA by Grant Thornton show that the fired James Matiza-led management bought Celestial Park for $32 million from Matay-Kingdom on September 29, 2014.

NSSA management ignored a BARD valuation report which priced the property at $24 million, a difference of $8 million.

The auditors noted that NSSA could have built a similar structure for about $27 million, meaning the BARD valuation was on point.

The documents show that GreenPlan valuators had valued Celestial Park at $36.5 million as at June 15, 2014.

BARD valuators put it at $24 million as at May 27, 2014.

Eventually NSSA forked out about $34 million when other charges are factored in.

“Given the significant difference of $12.5 million between the two market values derived by the independent valuers, one would have expected both reports to have been tabled for discussion and BARD valuation included for determining the offer for bargaining purposes,” reads the Grant Thornton audit report.

The audit noted that the BARD valuation of Celestial Park was dismissed by the then NSSA management on flimsy grounds.

“BARD valuation reports were being disregarded due to the fact that they were assigning values that were too low to properties and hence the authority would find it difficult to purchase any properties at those values as most sellers would be unwilling to sell.”

It noted that the transaction prejudiced NSSA of about $13,8 million.

The auditors also raised issues with the agreement of sale entered between the seller, Matay-Kingdom and NSSA.

The agreement of sale was prepared by Kantor and Immerman at NSSA’s request.

Reads the audit findings: “Clause 11 and 12 of the general conditions of the agreement of sale stipulate that the property is sold voetstoots even though the property was still incomplete at the time of signing of the agreement. The agreement did not include any set targets for the completion of the property as this was the property that was acquired when it was still under construction.”

It was also noted that the agreement of sale was silent on whether the price was inclusive of VAT.

“The agreement of sale was silent on whether the purchase price of $32 million was inclusive or exclusive of VAT. This led to a dispute with the seller. In terms of VAT (Chapter 23:12), where an agreement of sale is silent on whether the purchase price is inclusive of VAT or exclusive of VAT for registered operator, the amount charged is deemed to include VAT,” reads the Grant Thornton audit report.

It added: “The agreement of sale was silent on interest earned on funds in Trust. There is no evidence to suggest that due care was taken to ensure that the above mentioned issues were ring-fenced in an effort to protect the authority’s interests. There was also no evidence of a quantity surveyor or similarly qualified person being engaged to assess the building and generate a slag list for inclusion before the agreement was signed.
‘‘The satisfactory completion and or addressing of the snag list should have been one of the conditions precedent in the agreement.”

Grant Thornton also noted in its findings that according to the agreement of sale, NSSA was supposed to pay $4 million immediately to Matay-Kingdom with the balance being released upon completion of all conveyancing documents to facilitate transfer of the buyer.

“However, from our review we noted that there were other disbursements apart from the $4 million that were made available to the purchaser,” noted the auditors.