Money heist at CSC pension fund

THE Cold Storage Company (CSC)’s pension fund has been rocked by a scandal involving some former top executives, who are allegedly implicated in the spiriting away of millions of United States dollars diverted from dividends to a private account.

Documents gleaned by the Zimbabwe Independent reveal how dividends from Old Mutual investments were either understated or channelled into a separate account that does not belong to the pension fund.

Dividends were channelled into an account named Omlac EB Operations, which is not related to the pension. Former CSC employees claim that the funds have been locked for years.

e directors of Omlac EB Operations could not be ascertained during the Independent’s investigation.

e money was supposed to be moved to the current CSC pension fund administrator Marsh Employee Benefits — now known as BrightZim but that has not happened.

is has, therefore, exposed 832 pension fund members to the risk of losing out on their contributions.

“e fund’s dividends from Old Mutual investments were going into a separate account which does not belong to the fund. On Monday afternoon (next week) I should be able to get to the bottom of it. Dividends were being paid into an account named Omlac EB Operations,” a well-placed source to the developments said.

e former CSC employees told the Independent that funds belonging to the pension funds were, either, missing from

the company’s financial statements or under-valued.

Information gathered reveals that the government had agreed with the investor, Boustead Beef Zimbabwe to take over the pension fund debt but later discovered that the debt was understated by over US$18 million.

A deep observation by the former employees also discovered that there has been an undervaluing of shares and dividends citing that the fund was transferred from Old Mutual as a defined benefit to Marsh Employee Benefits (now BrightZim) in 2001.

The shares were worth ZW$317 503 528 (US$2,1 million) with Marsh confirming receipt of the same according to documents availed to the Independent.

However, contested account figures have ZW$33 million (US$220 000) although former management and administrator maintained that they did not receive data on the transfer, according to the employees.

This was in contrast to the membership data funds released by Old Mutual in July 2016. The investigation also revealed that pension fund committee members were advised by the Insurance and Pensions Commission (Ipec) to ensure assets are in place before the dissolution of the fund.

In auditing the assets, it was discovered that a total of 218 312 demutualisation shares were still intact and the pension fund had received dividend shares from Nedbank (9 891) and Quiltre (72 770) but the dividend was not reflected in the fund’s financials.

These shares are also not reflected in CSC financial statements while the shares from Nedbank were allegedly understated to reflect 276 while those from Quiltre were reduced to 8 798. A dividend of US$456 737,22 from Old Mutual shares from 2010 to date is still stuck in the Omlac EB Operations account. The same amount does not appear in either the CSC or the pension fund financials. The employees have since written to the Auditor-General (AG)’s office requesting a forensic audit. Ipec ordered the pension fund committee to dissolve it.

Ipec director for pension supervision Cuthbert Munjoma confirmed the development.

“There were no contributions coming in since 2001 as the sponsoring employer, CSC Private Limited, was no longer operational. This resulted in the accumulation of pension contribution arrears and the fund was eventually paid up in 2012, which made the continued existence of the fund untenable,” Munjoma said.

“Furthermore, membership data challenges led to the suspension of payments of benefits in 2012.”

According to a scheme of arrangement passed by the High Court for CSC, the contribution arrears, which amounted to US$4,5 million, were to be taken over by the new investor, who would liquidate over a 10-year period. Munjoma added that this has not materialised as the investor, Boustead Beef indicated that they are still in the process of reviving the company.

“Under the circumstances, the commission had to direct dissolution of the fund, such that members at least get some value from the existing assets,” he said.

Boustead Beef Zimbabwe has also raised the red flag on some of the anomalies at CSC. The government introduced a corporate rescue plan for CSC, appointing BDO Zimbabwe, whose brief was to investigate the pension fund and advise on the same.

BDO Zimbabwe was eventually disqualified during a creditor's meeting in March 2021 in Bulawayo over allegations of conflict of interest. Vonani Majoko won the bid to be the administrator and is currently collecting rentals from CSC tenants.

His phone went unanswered yesterday. Approached for comment, former CSC chief executive Ngoni Chinogaramombe referred all questions to CSC client relations manager (employee benefits division) Sheeba Takabinga. Takabinga referred the questions to BrightZim’s business development manager Alackias Gavure who curtly said: “We don’t issue comments or responses to third parties on client issues”.