SSC board orders N$55m investment deal probe

THE Social Security Commission is conducting an internal investigation to ascertain whether it lost N$55 million entrusted  with a South African investment firm.

The Issue has learned that the SSC board of commissioners ordered an investigation into how the investment of US$3 million, at the time of investing, was made.

The SSC is a government social protection agency, providing maternity, sick leave, workplace injury and death benefits to registered employees and their dependents. The agency is funded with money contributed by all employers and workers in the country. The SSC is sitting on a N$5 billion fund.

The commissioners started asking questions during March, allegedly because the management was failing to answer questions about the said investment.

The commissioners were allegedly only informed that the money was invested into an obscure South African firm by the name of Retirement Investments and Savings for Everyone (RISE).

A lack of satisfactory answers from the commission’s management is what led to the board requesting an investigation.

However, SSC CEO Milka Mungunda poured cold water on the notion that the commission has lost workers’ money in an investment feared to have gone wrong.

“I can assure you that no investments from SSC investments with RISE have been lost to date,” she said on Friday. 

Mungunda further said the SSC will issue a detailed media statement to address the concerns about the said investment in due course.

In March, the board allegedly requested a detailed report outlining the sequence of events on how the money ended up being invested with RISE.

The request was, last month, followed up by a more detailed list of instructions. The instructions are that the management provide the board with assurance that the said investment is in compliance with international investment principles and that it is also not in breach of SSC’s internal investment policies; That a second due diligence be conducted on RISE; The SSC management should provide the board with verified information detailing the location and status of the funds; A review of the agreement between SSC and RISE to identify any breaches and recommended actions if any breaches are identified; Management should ensure that all custody accounts for SSC investments are set up in the name of SSC and establish a viewing access to the investment bank account to monitor performance.

 BOTCHED INVESTMENTS

The SSC has a history of gambling with workers’ money under the guise of investments.

Last year, The Issue reported that the SSC lost N$120 million after it invested N$150 million into the now-defunct Small and Medium Enterprises Bank (SME Bank). The SSC at the time invested the N$150 million, paid in three different batches between July and December 2016.

At the time the SSC made the investments, both the SME bank’s auditors and the Bank of Namibia had already sounded alarm bells that public funds were being looted. While SSC CEO Mungunda was also serving on the SME Bank’s board of directors as well as that board’s investments committee. The Issue also reported that Bank of Namibia’s then head of banking supervision, Romeo Nel, had opened a criminal case with the Namibian police, indicating fraud, theft and money laundering were taking place at the SME Bank, during November 2016.

This was a month before the SSC made its final ‘investment’ of N$100 million of the N$150 million during December 2016. This information coupled with the fact that Mungunda was on the SME Bank’s board at the time raises questions about whether she was not reckless with workers’ money. The Issue, last year, reported that the transactions between the SSC and the SME Bank appeared to be a bailout rather than an actual investment. Mungunda was never asked to account for the SME Bank investments by the SSC and its board. 

While 20 years ago, the SSC was involved in another botched investment scandal which saw it lose N$30 million in what is now known as the Avid scandal, which saw then CEO Tuli Hiveluah and at least two senior executives at the SSC facing the chop. The SSC recovered N$10 million from the failed investment.

Between 2002 and 2020, three of the five executive officers presiding over the SSC have faced scandals related to mismanagement of welfare funds in its custody.

Interestingly, despite the loss of N$120 million and the High Court concluding that one of the board members of the failed bank played a role in the looting, the SSC CEO did not face any disciplinary action.