The National Social Security Authority (NSSA) is setting a great example for many corporates who lose money through corrupt activities by their employees.
Former general manager James Matiza and directors Shadreck Vera (investments), Patrick Mupani (finance), Tendai Mafunda (corporate services) and Bright Chidyagwai (ICT) corruptly made enormous sums of money from NSSA through hefty salaries at a time when the entity is paying its pensioners meagre sums of money. They awarded themselves monthly salaries of more than $40,000 each and huge loans.
Furthermore, a forensic audit revealed that they actually gave their lovers dubious loans. They are also accused of making questionable investments that effectively cost their former employer millions.
After unearthing the staggering corruption, the NSSA board decided to dismiss them, which is very normal when an employee engages in shady deals and gets caught. The board will report the quintet to the police for possible criminal prosecution for their alleged corrupt activities.
In addition to the two foregoing decisions, NSSA has just told Matiza, Vera, Mupani, Mafunda and Chidyagwai that they will have to pay back $1,5 million that they looted from the parastatal.
Board chairman, Robin Vela said the five will be retrenched with their pensions and benefits compensating for the monies that got from NSSA.
“The mutual agreement was one month’s salary for every year served,” said Vela. “The authority was to be paid back loans, taken out by the five, amounting to some $1,1 million. Company cars and other assets were to be returned to the authority or in the case of one bought at market value.
The net result was an owing to the authority by the five of some $450 000, which was to be satisfied, firstly by accessing the lump sum cash out of their commutable pensions, and the balance being left on account as housing loans at market interest rates of 11 percent over a 15-year term (provided the bond was registered with NSSA and title deed held by NSSA) and that the value of the property, on a forced sale basis, gave at least two times cover of the loan amount. In short, there will be no massive payout to the five former employees.”
We regard this tough response to corruption as a good example that must be followed by many other companies, among them parastatals, which have lost, and continue to lose money to thieving bosses.
Parastatals like Zimbabwe Broadcasting Corporation, CMED and others come to mind.
It is expected that companies or the government must sack corrupt employees.
However, merely doing that does not send that strong message to the culprits that their corruption is unacceptable and deserves the harshest punishment possible.
When you open criminal proceedings against the thieves you are beginning to exact more painful sanctions on them and when you demand full compensation for the monies they stole you are making the punishment much more meaningful.
We say this because many managers siphon millions from their employers knowing that the worst punishment they will receive is the sack yet the companies they worked for will not recover the stolen money. Therefore by demanding monetary compensation the offender gets his due punishment while the victim of their offence recovers that which was stolen from them.
It can be useful if this compensatory approach is applied in other cases where money is lost to corrupt bosses as happened to NSSA.
Although there are no grounds to prosecute them for questionable investments, revelations of their existence demonstrates the unfitness of Matiza and company to continue running the authority.
They recently came under fire for splurging $2,5 million in the now defunct CFX Bank, $12 million on overpriced starafrica corporation shares and $1,5 million on Africom Continental. As we write at least $45 million is locked up in Interfin Bank, which is now under curatorship. NSSA also lost $11,2 million worth of land to local authorities after failing to develop it.
The institution also dished out “non-profitable” loans to parastatals such as the National Oil Company of Zimbabwe ($3,1 million), Zesa ($9 million) and Cottco ($8 million).
Any manager who wastes his employer’s resources in this manner is liable for dismissal for gross incompetence, although sanctions such as Vela has pronounced on Matiza, Vera, Mupani, Mafunda and Chidyagwai cannot apply. That is why the five only have to pay back $1,5 million that they personally earned through opaque payments, not $92 million that NSSA lost through their injudicious investments in CFX Bank, starafrica corporation, Interfin Bank and others.
Nonetheless, the corrective action Vela’s board has taken to punish Matiza et al and ensure that they personally compensate their employer is an example worth emulating.