SATURNIA SCAM

…We never allowed externationalisation of US$40m – ousted Trustees

By NATION REPORTER OUSTED trustees of the controversial Saturnia Regna Pension Fund have denied willfully authorising the illegal externalisation of US$40m to offshore accounts and revealed that the irregularity was just a tip of the catalogue of corruption and irregularities threatening the Fund.

The trustees have now appealed to Finance Minister Margaret Mwanakatwe to urgently institute an independent forensic audit to arrive at the truth.

The trustees charge that it was unfair to punish the Fund when people responsible were the Fund managers who colluded with the Fund administrators.

According to a summary report of the trustees’ concerns, the trustees were concerned by the absence of basic governance controls and failure by the regulator to quickly, correctly, identify and respond to risks. The report says the trustees recently became aware that assets of the fund were transferred to a private limited company and further that the liabilities of a private company were being transferred to the Fund. “A private company curiously named Saturnia Trust Limited, with a similar name and postal address as Saturnia Pension, but called Limited and not Fund, was created by named individuals who happen to have ownership stakes in the Service Provider Companies,” said the report. The report says the trustees requested the Service Providers for the board resolutions and the PIA approval for the creation of this limited company and for the transfer of assets, but that to date this request remains unfulfilled. Further, trustees were also concerned by the comparatively high fees charged on the Fund by both the administrator and Fund manager compared to the market rates and considering the market size of the Fund and the expected economies of scale. The ousted trustees are also concerned that the trustees also abused their power of attorney by paying themselves fees monthly or quarterly without any trustee review or approval of any invoices. In addition, the trustees complained that the PIA published data and market research done by the administrator on behalf of the trustees showing that on average, Fund administration in the industry right now fees range between 1 percent and 1.5 percent of the cash contributions, However, Bencon was however currently charging 4.5 percent as administration fee. (3 percent on Lumwana employees) which is 4 times the prevailing rate. The former trustees are also concerned by the lack of granularity and transparency on the make-up of the property related expenses and fees as well as related party transactions and whether the proper tendering process is followed to ensure arms-length transactions that are beneficial to the pensioners. The trustees have therefore called for a review of the Fund Management fee calculation to ensure it is based on a sustainable formula. They also lamented a conflict of interest and related parties where the Fund Administrator (Bencon) and the Fund (Manager African Life) where controlled by the same entity and individuals posed a risk to the fund as the necessary checks and balances where non-existent.