Sat | Dec 15, 2018

Free-for-all at NIF, says Auditor General - Cronyism or corruption as billions of taxpayers' dollars are spent

Published:Friday | March 9, 2018 | 12:00 AM

Auditor General Pamela Monroe Ellis has released a damning report of possible cronyism and corruption at the National Insurance Fund (NIF), with billions of taxpayers' dollars now at risk.

The report, tabled in Parliament yesterday, details instances in 2017 where the NIF spent $27 million to purchase company shares owned by the spouse of a senior executive at a price that is approximately three times the value that the shares were sold at during the initial public offer -just one month earlier.

"However, the requisite approval from the minister with responsibility for finance was not sought for the acquisition of the shares in breach of the investment policy," noted Monroe Ellis.

"Further, (the) NIF did not present any evidence that the conflict of interest was brought to the attention of the chief technical director (CTD) and the board by the senior officer, contrary to the Ministry of Finance-approved Staff Order," added Monroe Ellis.

The report noted that the senior employee claimed that he had disclosed that it was his wife's company to the former CTD, who denied this was done.

 

Stock purchases

 

Monroe Ellis also reported that the NIF spent $783 million to purchase shares in eight companies between February 2015 and September 2017 without proper due diligence.

The NIF also purchased shares in two companies on the Junior Stock Exchange at a cost of $1.19 billion, which was in excess of the approved limits and without the review of its investment committee and the approval of the board and minister of finance as required.

"The purchase of shares in 11 additional companies at a cost of $903.26 million and US$340,200 was also undertaken without the review of the investment committee and the requisite approval of the board.

"The transactions not only breached the investment policy guidelines regarding approval levels but raises questions regarding transparency and accountability," said Monroe Ellis.