adminfinancial impropriety in Afre Corporation and its subsidiaries..
Afre resumed trading on the Zimbabwe Stock Exchange a week ago after a brief suspension to allow investigations into the alleged irregularities.
Finance Minister Tendai Biti ordered the investigation after it emerged Afre and its associate subsidiaries dabbled in shadowy activities rooted in loans they received from Renaissance Financial Holdings.
RFHL is the single biggest shareholder in Afre with a 33 percent shareholding.
The country’s second biggest life assurance firm said its exposure to RFHL and founding chief executive Mr Patterson Timba stands at US$6,4 million. Afre yesterday said it had started a legal process to recover the money.
Initial investigations at Afre have reportedly indicated the need for a more comprehensive probe into the firm and its subsidiary units regulated by IPEC.
IPEC chairman Mr Elisha Mushayakarara said the investigation was in conformity with the regulator’s mandate to protect policyholders’ interests.
“The Insurance and Pensions Commission has therefore decided to invoke Section 67 of the Insurance Act Chapter 24:07 and investigate Afre and subsidiaries regulated by Insurance and Pensions Commission,” he said.
Mr Mushayakarara said the need for an extensive investigation was necessitated by the realisation that Afre and its associates could be facing problems following irregularities discovered at the group.
“The Commissioner of Insurance, Pensions and Provident Funds has been directed by the Insurance and Pensions Commission Board to appoint an investigator to start work immediately” said Mr Mushayakarara.
Afre yesterday announced three new board members to replace three directors who recently stepped down.
This follows the resignation of Econet Wireless CEO Mr Douglas Mboweni as Afre chairman together with non-executive directors Mr Ricky Mapani and Dr Robert Tindwa.
“Excessive interference” by Minister Biti was cited as the reason.
The new directors, in a non-executive capacity, include Econet Wireless chairman Mr Tawanda Nyambirai, human resources expert Mr Misheck Manyumwa, banker Mr George Nyashanu and new CEO Mrs Sibusisiwe Ndlovu.
Afre said it had re-appointed Mrs Tracy, Krison Vengai and Mr John Gould to the board and all return to the board in non-executive capacities.
The directors have been appointed at the recommendation of Econet, which holds a 20 percent stake in the ZSE-listed life assurance services group. The appointments are reportedly meant to ensure corporate governance matters relating to the group are reviewed, enforced and enhanced, as necessary.
To prevent a recurrence of irregular inter-party transactions Afre has constituted a three-member team called the Related Party Transactions Committee.
Online Reporter