Bernard Mpofu, Chief Business Reporter
The Insurance and Pension Commission (IPEC) has concluded investigations into Africa First Reinsurance Corporation (Afre) subsidiaries regulated by the commission after it emerged that the entities were prejudiced by delinquent behavior by former executives.
IPEC last year commissioned international audit firm, KPMG, to carry out a probe into First Mutual Life, First Mutual Reinsurance and Tristar Insurance Company after allegations of delinquency against former executive chairperson Patterson Timba, who was accused of abusing policyholder funds to finance his personal businesses.
Last year in November, IPEC said the investigator had completed a draft of the report although it needed "beefing up in a number of aspects".
This came after a preliminary audit undertaken early this year revealed that the insurance companies were in deep waters.
IPEC chairperson Elisha Mushayakarara said an investigator was commissioned by the insurance regulator to "delve deeper and carry out a more in-depth investigation" into Afre Corporation subsidiaries.
IPEC commissioner Manette Mpofu told The Financial Gazette's Companies and Markets that the insurance industry regulator had submitted a report of the investigation to Finance Minister Tendai Biti, following conclusion of the probe. She however declined to comment on the findings.
"The draft report is now with the Minister of Finance for his consideration. Moreover, AFRE and its subsidiaries have been given a copy for comments. This is in terms of the Insurance Act. These (the findings of the investigation) cannot be disclosed as the Minister of Finance is still considering the report," said Mpofu.
Biti this week confirmed that the report had been completed, adding that his ministry would consider its recommendations.
IPEC in August blocked a planned annual general meeting of Afre Corporation shareholders, insisting this could only be undertaken after investigations into the group's operations had been concluded.
This frustrated Econet Wireless, another key shareholder in Afre Corporation, from proceeding with a planned rights issue that could have resulted in the telecommunications group shoring up its interest in the diversified financial services group.
IPEC also blocked the disposal by Econet of Rainbow Tourism Group (RTG) shares held by Afre Corporation to the compulsory national pension fund, National Social Security Authority (NSSA). Econet controls the Afre Corporation board since the ouster of Timba.
Afre Corporation is understood to be exposed to the tune of over US$6 million to RFHL, whose banking unit has been under recuperative curatorship since June last year.
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