THE Social Security Commission is yet to explain what happened to N$55 million that is allegedly unaccounted for in what is starting to look like a botched investment.
Chief executive Milka Mungunda and board chairman Marcus Kampungu have yet to respond to detailed questions about what happened to the money placed in a little-known South African investment outfit, Retirement Investments and Savings for Everyone (RISE), about two years ago.
The Issue has also learnt that senior executives from the SSC were in South Africa on a fact-finding mission two weeks ago, after it was reported that the government welfare agency is unable to account for the money. It is believed the money was part of a larger amount moved out of Namibia to be invested in South Africa.
The Issue, last month, reported that the SSC board started asking questions about the missing N$55 million early this year. This was after the management was failing to provide reports outlining where the money was invested and how the portfolio was performing.
The board then ordered that management provide it with assurance that the investment is in compliance with international investment principles and that it is also not in breach of SSC’s internal investment policies. It also ordered that a second due diligence be conducted on RISE and that the SSC management provide verified information detailing the location and status of the funds.
A review of the agreement between SSC and RISE was also ordered to identify any breaches with recommended action. Management was further instructed to ensure 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.
It has now emerged that RISE invested an undisclosed amount of money into another South African investment firm, Plane Tree Capital. This third-party investment, The Issue has learnt, was in breach of RISE’s contract with the SSC.
Plane Tree Capital CEO Richard Hart, last week told The Issue via email that his company had no direct dealings with the SSC. The SSC money it had in its custody was invested by RISE. “The investment was received from RISE on 1 June 2023 and fully redeemed on 31 October 2024,” he said, while explaining that Plane Tree Capital had no direct dealings with the SSC. Hart, however, confirmed that around 29 November 2023, the SSC held meetings with them to discuss the said investment.
“We had no direct engagement with SSC other than an on-site due diligence meeting with their trustees to discuss our investment process as the product advisor,” Hart said.
He added that RISE invested the money in Plane Tree’s US Dollar Cayman Mutual Fund. During the 14 months the money was in Plane Tree’s custody, it earned a return rate of 12.7% in interest.
Hart could, however, not say how much money RISE invested on behalf of the SSC.
RISE was allegedly identified and picked by the SSC’s investment advisors and consultants, Multi-Wealth Management.
Managing director Bryan Hoveka did not respond to detailed questions about the said investment and the process undertaken before the investment was made.
Multi-Wealth Management is believed to have done the due diligence and recommended that the SSC invests money with RISE, which was only licensed as an authorised financial service provider in South Africa in August 2018.
Questions are now being asked as to why the board did not appoint an external independent body to investigate what went wrong with the investment. At least two experts in the investment and banking sector told The Issue that the management might conceal any information of irregularities, if any occurred.
