More financial scandals emerge at Natsave


THE Anti-Corruption Commission is investigating more financial irregularities that have emerged at the government-owned Zambia National Savings and Credit Bank involving top management.

But bank managing director Cephas Chabu says there is a smear campaign building up against him arising from a disgruntled employee working within the bank.

Last week, fire gutted two offices on the seventh floor of the Savers House, which according to sources, houses financial records the ACC needed for the investigations.

According to an audit report, Chabu is entangled in an irregular payment for a quarter-page advert in a French magazine at over K630,000.

NATSAVE sealed a contract on January 13, 2012 and made a payment of 46,366 euros to French advertising agency, Universal Communications, for a quarter-page advertisement in Le Point Magazine through an agent, without following tender procedure, an advert which was never published.

And according to latest correspondence, the bank has signed another contract for a quarter page advertisement in the UK Daily Telegraph newspaper.

On Monday this week, NATSAVE head of legal affairs Mwila Chibiliti wrote to Chabu, secretary of the bank’s tender committee Boniface Locha, finance director Nyambe Nyambe and other senior managers, questioning how the bank had gone ahead to sign a payment agreement for the advert in the Daily Telegraph, through agents, without following tender procedure.

“Please advise why you did not request PM Consultants to submit at least three quotations as is required by procurement procedure, especially that the Daily Telegraph is not the only newspaper they [agents] purportedly represent and neither is it the only newspaper in the UK. What were the compelling reasons for single-sourcing?” Chibiliti wondered.

“Please note that my concerns arise from the very fact that in similar circumstances and without following tender procedure, the bank lost 46,000 euros in 2013 to people purporting to be agents of Le Point Magazine, up to date this money has not been recovered. Even in this latest instance, the contract was signed without management or Management Tender Committee consideration.”

He informed management that the bank had attracted tax obligations as a result of the single sourced advertisement deal.

“The same incident has happened here where the bank is now liable to 8,000 pounds net of taxes, seeing that the contract has been signed and PM Consultants are pushing for payment with director finance on the basis of the signed contract,” said Chibiliti.

“None of these contracts were reviewed by the legal department for compliance purposes, neither were they sent to the Attorney General as required by Article 54 of the Constitution, considering that materiality of the contract nor the sums involved as well as the standard contract template was approved by the Attorney General.”

The ACC has since launched investigations into the financial irregularities at the bank, according to sources.

“The ACC are also investigating the MD for abuse of office, where he has been processing rentals for his house using bank resources, which is against his 2015 contract,” said the sources.

“That is why we are saying the fire that gutted the offices on the seventh floor was not an accident.”

But Chabu, in reaction to the accusations, said the fire was an attempt to frame him in the financial scandal by known elements operating within the bank in an orchestrated smear campaign.

“It can also be a scheme, somebody trying to frame someone to say, ‘Since these investigations are going on, if we did this…’ because there is a backup which is done in IT, and IT is on the fifth floor. This can just be a frame from somebody who is ignorant about the process but wants to use them to [make] things look like they are related,” Chabu explained.

“The people who are framing [me] must be the people who started the fire; that is what I would say, because it is not making sense to me as a professional banker because these records are spread throughout the entire building.”

He said the bank’s procurement and human resource departments were on the first floor, giving credence to the idea that the fire could not be linked to him in an attempt to cover-up a ploy to destroy critical evidence that would be used against him.

“A person of my level of status in the industry as a seasoned banker, I cannot resort to this. It is very unfortunate that someone can think like that. Procurement is not on the seventh floor, it is on the first floor. HR is on first floor, and when the purchase requisitions are raised, they go through procurement, then they go to HR. I don’t know how possible it is that the fire on seventh floor will erase the information that is in procurement, or erase the information in HR,” Chabu explained.

“Even with finance itself, when they capture the transactions, there is always a back-up for each transaction done. So, the issue of someone resorting to disturbing finance does not hold because the second leg of the transaction is HR, procurement, it is in the user departments. That is how internal controls are; this information is in various departments.”

But when asked why someone within NATSAVE would want to frame him, Chabu said some decisions which he made could have upset some junior staff.

“I may not know, but you see, in my job, there are certain things that maybe you are not comfortable with, which I may have stopped and somebody maybe is not happy with that. It can be external parties or internal parties, but one thing is that I can’t support anything to mortgage the institution,” he responded.
“So if that frustrates certain people, it can be outsiders, insiders, we can speculate but the point is that there are certain things that you can say no to, and certain things you say yes to.”
Chabu also revealed that a purported ACC investigation over abuse of office was part of the smear campaign, together with the payments made to advertising agencies without following proper tender procedure as cited in the audit report.

“Yes, because you see, these issues are in the 2012 audit and were addressed, and their recommendations were done in terms of following up and doing certain things, that was on record. In summary, it appears there is a smear campaign, that is my feeling and I am just trying to establish now what could be the reason for that ‘disgruntledness’,” he added.

And when asked why nine executive directors of the bank had signed a vote of no confidence in his management style, Chabu said some directors were made to sign under duress.

“That was fraudulent because I have spoken to some of the directors; they were made to sign but the final document, they didn’t even see it. The issue here is that there are those who had very strong views about this and in the process, they pushed [and] were the key drivers of this whole thing. So that one, it was done under duress,” said Chabu.

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