By Alois Vinga
THE National Social Security Authority (NSSA) has dismissed claims of corruption ignited by the recent disposal of the organisation’s shares held by ZB Bank shares to controversial business tycoon, Kuda Tagwireyi.
NSSA says the deal was procedural and above board.
Reports last week indicated some 57 million NSSA shares, worth over $1 billion, were traded on the Zimbabwe Stock Exchange (ZSE) same day and transferred to a Tagwirei linked company.
Key stakeholders like the Zimbabwe Congress of Trade Unions (ZCTU) which has a board member representing workers’ interests in NSSA, have expressed unhappiness with the deal and the unclear circumstances under which it was sealed.
However, in a press statement this week, NSSA acting chief executive officer Arthur Manase dismissed the allegations clarifying that the transaction was carried out legally and without prejudice.
“As part of the due diligence process, NSSA enlisted a reputable financial advisor to do an independent valuation to ensure NSSA had derived the correct value from the transaction.
“The valuators concluded that the deal where the parties agreed to calculate share swap ratio based on a 30 trading day volume weighted average price (VWAP) to September 30 2020 after including a 70 % premium was favorable,” he said.
Manase said based on the formula, VWAP prices for both ZB (11.3183) and CBZ ($43.2858) using 30 trading information from the 20th of August, authorities came up with a fair share swap ratio of 2.25 ZB shares for 1 CBZ share after including the 70 % premium.
“Therefore, for the 50 % NSSA received US$11.6 million which was equivalent to $948 million after factoring transaction costs. This money was invested in an asset that yields foreign currency,” he said.
NSSA said the decision to dispose of the bank shares was reached by the board in May 2020 through resolution 135/39 /08/06/2020 which approved the disposal of the authority’s entire 37.79 % shareholding in ZB Financial Holdings (ZBFH).
This was done in accordance with NSSA’s Investment Strategy guided by the NSSA Investment Policy, The Public Finance Management Act and the NSSA Act with respect to investments classified as significant.
Manase said the Reserve Bank of Zimbabwe’s directive which indexed minimum capital requirements for Tier1 and Tier2 banks at the equivalent of US$30 million and US$20 million respectively also made it impossible for the already overwhelmed NSSA to meet the capital requirements.