GMB fund looted
By Roadwin Chirara, Business Writer
Friday, 29 April 2011 16:20
HARARE – The Grain Marketing Board (GMB)’s pension fund has been rocked by
serious allegations of corruption and misappropriation of funds, and company
assets by senior managers.
Although company chief executive Taona Munzvandi defended his contentious
acquisition of a Borrowdale house and the payment of hefty allowances as
above board, a preliminary report by PricewaterhouseCoopers (PwC) queried a
number of transactions by the fund’s top hierarchy.
The audit particularly singles out extravagant expenditure and non-taxable
allowances to George Magosvongwe’s board, where the likes of Munzvandi drew
US$12 000 in December 2010.
However, the GMB pension fund boss denied the existence of a report
detailing such perceived plunder, saying the allowances were “in line with a
human resources consultant recommendation”.
“I have not seen that report, but most of the information that has been
forwarded to the auditors. There is nothing wrong with the amount paid as it
is line with a report of what non-executive directors and the chairman
should be paid,” Munzvandi said.
An outgrowth of GMB, the contributory fund had over 2 500 members and assets
worth US$2,8 million as at December last year.
Like its parent company — GMB, which has always been dogged by allegations
of corruption and dodgy deals — the fund is now facing a class action or
suit from 17 ex-employees for underpaying pensions and at a time Munzvandi
and other company bosses received hefty sums of money from December to
January this year.
The state-run grain procurer, for instance, has been subject to numerous
investigations over the years, with such former managers as Martin Muchero
being arraigned before the courts for bilking the strategic food reserve
company of millions of dollars in 2002.
Apart from Muchero, a raft of successors and other smaller depot officials
countrywide have also been fingered in shady dealings.
“Allowances amounting to US$46,002 (for the CEO) and US$11 780 (for the
chairman) as well as other allowances for the board were not taxed.
The value of the allowances is not specified in amount, as expected, in
minutes of the board meetings,” the audit firm said.
Crucially, the audit firm noted that some benefits paid out in 2010 were not
submitted to Zimra for tax assessments, as is the norm with any termination
benefits payout process and as recommended by the fund’s actuaries.
“Actuary advice should be sought when payments are to be made to members
that seem to qualify for such payments if the amounts differ from the
financial valuations,” PwC said in the report.
Discrepancies were also found in pension payouts with some members being
overpaid, while those not recorded in the funds books made claims.
“Members with almost nil/low balances as per the most recent actuarial
valuation were paid amounts which differ significantly from the ones
recommended by the actuary. Claims were accrued/paid to persons that do not
appear on the actuarial valuation,” PwC said.
The fund chief executive was also fingered in a ploy to alter deeds of sale
documentation or papers for six Charlotte Brook stands, in a bid to reduce
liability development and levies to the Goromonzi Rural District Council
(GRDC).
PwC also noted that the stipends paid, particularly cellphone allowances,
were above normal rates and were not supported by board resolutions for them
to be paid.
In the real estate saga, the accountancy firm recommended that the fund
reverts back to the original deeds arrangement to avoid reputational risks
or damages and penalties for the action.
“Deeds of sale altered should be corrected and the appropriate amount paid
to the Goromonzi Rural District Council (GRDC).Other intentional actions or
fraudulent activities may be initiated by any of the staff member if such a
culture is maintained.
“Exposure of the Fund on such an ill note resulting in at least reputational
damage,” the audit report said.
The GMB pension fund is also found to have had workers on its payroll, but
who did not have any documentation to back up or support their employment.
In the meantime, Albert Mandizha’s GMB has repeatedly failed to pay farmers
for crop delivered in recent years.