Nervy times at Fidelity Life

Nervy times at Fidelity Life

- in Claims, Commercial Lines, Home, Life Insurance, Markets, News, Regulation
Fidelity Life

Enacy Mapakame and Livingstone Marufu
A FORENSIC audit of Fidelity Life Assurance’s financial statements that started in April has been extended to August amid indications the auditors — KPMG Accountants — are keen to investigate suspended MD Mr Simon Chapereka’s 13-year reign at the helm of the insurance group.

Mr Chapereka took over as Fidelity Life managing director in 2003.

The audit is being conducted in terms of Section 67(2) of the Insurance Act (Chapter 24:07).

Mr Chapereka and finance director Mr German Mushoma are under investigation for alleged corporate governance deficiencies. The duo was suspended in April to pave way for the forensic audit, instigated by industry regulator, the Insurance and Pensions Commission.

The audit was initially due for completion at the end of May and has been extended to allow the team to gather as much information as possible.

Audits of this nature can be used to initiate prosecution of alleged offenders.

Internal investigations at Fidelity Life have uncovered alleged financial misappropriation and a residential stands racket, reportedly orchestrated by Messrs Chapereka and Mushoma.

Sources close to the developments told The Sunday Mail Business that the rot started years ago. Senior managers are accused of pampering themselves with residential stands, including those meant for low-income earners.

Mr Chapereka is alleged to have allocated himself 12 residential stands at Fidelity’s Manresa and Southview projects and advanced himself an interest-free housing “loan” of US$300 000.

The loan had a tenure of 10 years, with monthly repayment installments pegged at US$500; implying by the end of the repayment period, Mr Chapereka would have repaid just US$60 000 — leaving the company with a US$240 000 loss.

Other managers are also said to have advanced themselves massive soft and non-performing loans collectively amounting to millions of US dollars.

In emailed responses to our questions last week, Fidelity Life acting MD Mrs Nyaradzo Matindike said, “The audit is ongoing and updates will be provided as and when they are complete.” Mrs Matindike referred this publication to a statement released by group chairman Mr Gregory Mataka earlier this year which insinuated a corporate governance deficit.

The statement read in part: “Following the training on corporate governance in May 2015, the board embarked on a review of the company’s policies and procedures and internal processes to align them with best practice.

“While these internal processes were ongoing, IPEC requested an onsite examination.”

No comment could be obtained from Mr Chapereka or KPMG Accountants.

Since the scandal erupted late last year, it has claimed the scalps of some top officials at Fidelity Life such as former chairman Mr Lawrence Tamayi, who was reportedly forced to retire in December 2015.

Two non-executive directors — Mr Memory Nguwi and Ms Catherine Chitiyo — left after disagreeing with the way the firm was run.

Valued by the market at US$12 million, Fidelity Life is Zimbabwe’s second-largest listed insurer after Old Mutual.

In 2015, the firm reported revenue had climbed 36 percent to US$52,1 million on firmer residential property sales and improved premium collections.

Meanwhile, Fidelity has no other plans in the property development in the near future as development of Langford estate is expected to start in June 2017.

In all, 11 634 stands of 240 square metres each are expected to be delivered in the low to middle-income project over five years.

“Our thrust at Fidelity Life is to create value for our policyholders and we will continue to look for the best investment options that provide the best returns to our policyholders and shareholders,” said Mrs Matindike.

She added: “The scale of a project of this nature which we expect will yield over 11 000 fully serviced stands cannot be underestimated and we envisage the project to take up to five years to complete.

“We have started the town planning and requisite processes which are quite detailed and this will take up to end of the year.” – The Sunday Mail

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