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Business Writer
The forensic audit of the National Social Security Authority (NSSA) was biased against former board chairman Robin Vela and was silent on abuses of the multibillion fund by two former Social Services Ministers.
As such, the High Court this week quashed the audit findings as they just implicate Vela in wrongdoing.
The differential treatment of Vela and the ignoring of abuses by former ministers Petronella Kagonye and Patrick Zhuwao was critical factor in the High Court finding bias against the authority’s former board chairman.
Vela had challenged the report produced on behalf of the Auditor – General of Zimbabwe by BDO chartered accountants to probe the pensions body saying it ignored crucial documents in what he averred was a targeted witch-hunt.
He sought the High Court to declare the charges in the report implicating him nullified on the basis that they are grossly “delinquent, biased, incomplete and targeted”.
In an 18-page judgment delivered last Wednesday, the High Court ruled that lack of impartiality by BDO auditors was critical to the credibility and validity of the entire forensic report.
The auditors failed to consider Vela’s responses to their questionnaire, while they solicited to testify against him for a fee in the event criminal charges were laid against him or he was hauled before a disciplinary authority.
Vela also proved BDO’s double standards approach as he referred the court to notable events, which happened during the period covered by the audit, which failed to make adverse findings against two former ministers of Public Service and Social Welfare — Petronella Kagonye and Patrick Zhuwao, for abuse of NSSA funds, among other wrongs at the pension fund.
Based on the facts presented and failure by the auditors to explain how they came up with such findings to the exclusion of some key culprits implicated in the abuse of the pension fund, Justice Webster Chinamora granted the application by Vela and quashed the report.
He ruled that lack of fairness affected the audit report resulting in the former NSSA chairman being recipient of unequal treatment compared to Kagonye and Zhuwao.
The two were also implicated in the gross abuse of NSSA funds.
The report was found to be silent on the financial improprieties of Kagonye and Zhuwao during their time as Cabinet Ministers in charge of the then Public Service and Social Welfare portfolio.
Vela proved that he was not yet board chairman of NSSA when the authority bought properties from Metbank at inflated prices, but the report ascribed to him the loss of US$4 million in a debt swap deal involving the bank’s property.
The court also heard that Kagonye forced NSSA to sponsor a disability conference in her Goromonzi South constituency for US$200 000 and to make a further donation of US$200 000 to a school in the same constituency.
But the auditors did not criticise the minister.
Vela also argued that Kagonye ordered NSSA to appoint Lameck Danga as managing director of National Building Society after he came second in interviews.
During his tenure as minister, Zhuwao had forced NSSA to pay US$400,000 to Chikuni Mtiswa, overturning a board resolution, and yet the auditors blamed Vela for close to US$600,000 paid out to dismissed employees.
But the auditors’ argument was that the accusations against Zhuwao and Kagonye were clearly outside the scope of their mandate, which Justice Chinamora rejected saying the excuse was “disingenuous if not dishonest” because the terms of reference extended to human resources and “any other issue that may arise”.
Justice Chinamora stressed the point that the inaccuracies in the report spoke to failure by the auditors to apply their mind to the issues for determination before them.
The allegations made by Vela, he said, called for a rebuttal beyond glossing over it. However, after the auditors elected not to dispute Vela’s arguments, the court found no conceivable basis for them to say that the report was backed by factual evidence.
“On the principle that what is not denied is deemed to have been conceded, the applicant’s claim would carry the day,” said Justice Chinamora making inferences against the auditors.
“Either the auditors were biased against the applicant, or they did not apply their mind to the facts before them when conducting their forensic audit. On the extreme end, the court is compelled to conclude that it was case of incompetence.”
The court found that the record showed that it was within auditors’ power to eliminate some of the failures which undermined Vela’s rights and yet no convincing reason was given for not confronting the alleged financial improprieties of former Ministers Kagonye and Zhuwao.
“Inevitably, I am satisfied that the applicant has established that there was unequal treatment between the applicant and the ministers,” he said.
“In the absence of a rational explanation for the differentiated treatment, it is inescapable to conclude that the applicant established the ground of bias.”
Fortune Chimbaru who argued the matter for NSSA claimed that the authority had no knowledge of Vela’s detailed allegations and regarding the attack on the forensic investigation process, the pension fund deferred to the BDO “as the party was better placed to respond”.
She, however, told the court that the audit process was conducted lawfully and that no valid basis existed for setting aside the report arguing it was the pension fund that was being audited and not Vela.
In addition, Chimbaru contended that Vela’s remedy lay in suing for damages for defamation if he perceived that the report unfairly cast him in bad light.
BDO denied that there was anything irregular, unreasonable, incompetent, biased, malicious or unfair about the report.
It maintained that it exercised its discretion reasonably when it dealt with information received from Vela and others implicated in the audit and that it had carried out its mandate in terms of its brief from NSSA, arguing that the report was factual and impartial.
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