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sound business sense.
NSSA received a proposal from the Finance Ministry to invest in troubled Renaissance Financial Holdings Limited (RFHL) amid revelations that its banking arm was exposed to more than US$13 million borrowed by key shareholders.
NSSA general manager Mr James Matiza said it had been deemed prudent, in view of the difficulties Renaissance faces, to engage the services of a reputable auditing firm to examine the financial institution’s current situation and future prospects.
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Thereafter, he said, a recommendation would be made to NSSA on whether or not investing in Renaissance would make sound business sense.
“The findings of the auditing firm will then be presented to NSSA’s board of directors, which has the final say on NSSA investments.
“The board will then make a decision on whether or not to invest in Renaissance, based on the report from the auditing firm,” said Mr Matiza.
He said NSSA had the responsibility to invest money it received from contributors to the national pension fund to ensure the growth of the pension fund in the interests of pensioners and beneficiaries.
NSSA’s investments fall into three broad categories, which are real estate, the equity market and the money market. Roughly a quarter of the contributions to the national pension fund comes from the civil servants.
“It has an established investment policy to guide it in these investments. The investment criteria laid out in this policy include the preservation of assets’ value, liquidity, profitability, investment diversity, security and matching assets with liabilities,” said Mr Matiza.
He said NSSA’s normal investment procedure is for recommendations to be made by analysts in its investment division to its management investment committee, which in turn makes recommendations to the board’s investment committee.
The committee then makes its own recommendations to the full board.
The other criteria are the inclusion of investments that generate productive employment, higher productivity and export competitiveness, investments in residential accommodation and other social amenities, and investments that support empowerment.
NSSA chairman Mr Innocent Chagonda added that, contrary to media reports that there was some conspiracy in “bailing out Timba” his board does not solely make decisions regarding investments.
“Issues of investments at NSSA are first handled by management who make recommendations to the board committee on investment. The board committee then makes recommendations to the full NSSA board who then make a decision as to whether particular investments should be proceeded with or not,” said Mr Chagonda.
Mr Chagonda denied that he sat on any of the boards of Mr Timba’s companies as alleged by the founding president of the Affirmative Action Group Mr Phillip Chiyangwa.
Online Reporter