HomeLocalNSSA auditors suffer another blow

NSSA auditors suffer another blow

BY STAFF REPORTER

Auditors BDO Zimbabwe Chartered Accountants are yet to submit a Supreme Court appeal challenging the setting-aside of sections of their National Social Security Authority (NSSA) forensic audit implicating former chairperson Robin Vela in cases of maladministration.

The firm filed a notice of appeal 30 days ago, but has not pursued the matter.

The appeal, in which the audit firm said it intended to dispute findings of “bias” and inaccuracy by Justice Webster Chinamora, suffered another blow last week after High Court judge Justice Paul Musithu upheld a US$22 million arbitral award against NSSA in favour of Housing Corporation Zimbabwe (HCZ), further contradicting the BDO audit report.

BDO had cited a NSSA offtake agreement with HCZ as a central pillar in allegedly irregular deals that prejudiced the pensions body, claiming the company was a fraud that was merely a week old when it was granted the contract.

Vela was identified as one of the principal actors in the deal and accused of causing financial prejudice amounting to US$104 million.

The audit findings ignored a ruling by independent arbitrator Peter Lloyd in favour of HCZ.

NSSA further lost in the High Court before Justice Esther Muremba in 2018 after HCZ approached the court to block the pensions body’s attempt to secure a US$16 million guarantee from Zimnat Life Assurance for alleged breach of contract.

Vela approached the High Court challenging the BDO audit report on grounds that, among other things, the HCZ agreement had already been settled by two judgements, which found no breach of contract and had granted the firm damages against NSSA for terminating the agreement.

He also disputed claims that the company was one week old, saying HCZ was a special purpose vehicle incorporated by Housing Corporation Africa specifically to facilitate the NSSA transaction.

In a scathing ruling in Vela’s favour, Justice Chinamora said BDO had been shown to have been biased and it had failed to explain numerous discrepancies including why it attributed a Metbank debt swap to Vela yet he was not chairperson at the time.

“Further, the question of alleged inflated payments in respect of Metbank properties and loss of US$4 million in a corrupt debt swap deal was not addressed.

“The applicant’s (Vela) complaint was that the inflation of prices and swap deal had nothing to do with him as he had not joined NSSA when this occurred. No cogent reason was given for not providing an answer,” Justice Chinamora said.

Justice Chinamora also criticised BDO for ignoring the two existing judgements on the HCZ matter, which exonerated Vela:

“The manner in which the auditors ignored two extant and material judgements is also cause for concern and shows that those judgements were viewed as constituting an inconvenience.”

BDO Zimbabwe is reportedly under pressure from BDO International to explain the audit report after lawyers representing Vela wrote to its Belgium headquarters advising that they would be seeking legal damages arising from the audit report.

Vela now accuses BDO Zimbabwe of filing a frivolous appeal in a “bid to buy time”.

“The audit report did not rise to the standard of a forensic audit by any standard and only gained credibility on account of the BDO global brand and at great expense to my professional reputation,” Vela said, confirming his intention to take legal action against BDO International.

The dispute between NSSA and HCZ, which was central to alleged losses cited in the BDO audit report, started after then Labour and Social Welfare minister Petronella Kagonye ordered the cancellation of the contract for the construction of 8 000 housing units following her appointment after the November 2017 coup.

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