ZACC Chair’s Husband, SB Moyo, Is Director In NSSAgate Implicated Company

The Zimbabwe Anti-Corruption Commission (ZACC) chairperson Loice Matanda-Moyo faces the situation of ZACC needing to probe possible corruption allegations involving her husband, Foreign Affairs Minister SB Moyo.

It has emerged that SB Moyo was a director at Fernhaven Investments, a military-owned company which is named in the NSSA forensic audit report released a few weeks ago. SB Moyo’s directorship of the company is evidenced in high court judgements for other cases such as the one linked here.

Fernhaven possibly prejudiced NSSA of finances which the social security company paid after a company which is majority-owned by Fernhaven (Africom), defaulted on a loan. NSSA is only a 4.5% shareholder in the company but ended up paying half of the money to cover the the loan defaults.

Here’s an excerpt from the NSSA audit report that explains the matter:

7.1.2 Transactions with Africom

Background

  • Africom (Private) Limited had a loan with Afreximbank, where it was failing to meet its repayment obligations.
  • The capital amount outstanding was US$15.8 million, with interest accruing at 6.5% per annum. The lender then demanded that shareholders should give guarantees on the outstanding balance.

Requirement

  • A Board resolution passed 14 October 2013 authorised management to issue a guarantee to the extent of its 4.5% shareholding in Africom.

Findings

  • We noted that on 12 December 2013, NSSA, having a shareholding of 4.5%. in Africom, became the sole guarantor to the loan. This action was contrary to the Board resolution.
  • We also noted that Fernhaven Investments which had 51% shareholding in Africom indemnified NSSA and provided its property, Longcheng Shopping Mail as security.
  • The approval for NSSA become a guarantor was signed by the former Public Service, Labour and Social Welfare, Minister (Nicholas Goche) on 4 December 2013.
  • The authority failed to comply with the Board approval, as it became sole guarantor of the full debt of US $15.8 million when it only had a shareholding of 4.5%

Financial prejudice resulting from the guarantee

  • In September 2015 after Africom had persistently defaulted on servicing the debt, payment was demanded from the guarantor (NSSA).
  • As per the indemnity agreement, NSSA should have foreclosed on the Fernhaven pledged Longchen property in order to raise the money to settle the debt.
  • We were not availed with evidence of the Authority making efforts to foreclose on the pledged property. Instead, NSSA approached Zimbabwe Asset Management Company (ZAMCO) to take over the debt.
  • A Board resolution dated 26 September 2017 gave instruction to pay ZAMCO a transaction cost of $600,000 provided that management engaged the Ministry of Defence with the hope of getting them to pay part of the amount. Ministry of Defence is the parent company for Fernhaven.
  • ZAMCO subsequently took over the debt on 16 January 2018 after NSSA had paid a transaction cost of $606,279.
  • The Ministry of Defence is repaying 50% of the transaction cost ($303,140) over an agreed period. This means the financial loss to NSSA on the transaction has been reduced to $303,140.

Asked about the conflict of interest issue in the possible investigation into Fernhaven activities involving NSSA, Matanda told the Sunday Times:

As I said before, I can’t be involved in such cases in any way.

You can download the NSS forensic report here.


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