Mozambique’s Social Security demanding return of US$1.7m invested in aviation company

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Mozambique’s Social Security demanding return of US$1.7m invested in aviation company

12:53 CAT | 24 Mar 2016

Mozambique’s National Social Security Institute (INSS) has every intention of recovering the money it invested last year in the company CR Aviation, which is 40 per cent owned by Rogerio Manuel, chairperson of the employers’ organization, the Confederation of Mozambican Business Associations (CTA).

The INSS signed a memorandum of understanding with CR Aviation, under which the INSS was to invest seven million US dollars in the company. The INSS was to acquire 15 per cent of the company’s shares, and part of the money was to be used to finance the acquisition of four light aircraft, plus the expenses of maintenance and inspection.

The justification for this operation was an INSS decision to diversity its portfolio of investments, and to support small and medium companies owned by Mozambican citizens.

The relation between CR Aviation and the INSS was made public in January by the weekly paper “Magazine Independente” (MI), which found that the Minister of Labour, Employment and Social Security, Vitoria Diogo, had demanded that the deal be cancelled.

Diogo had discovered serious anomalies in the arrangements – not least of which was that CR Aviation is not even quoted on the Mozambican stock exchange (BVM), and the rules of the INSS do not allow it to invest in companies unless its shares can be trade on the BVM.

By the time of Diogo’s intervention, the deal had not been completed, but the INSS had invested 84 million meticais (1.7 million dollars, at current exchange rates) in CR Aviation.

On Tuesday, INSS chairperson Francisco Mazoio declared that the INSS was insisting that the money be returned.

According to a report in Wednesday’s issue of the independent daily “O Pais”, Mazoio told members of the parliamentary Plan and Budget Commission, who were visiting INSS headquarters, that the money must be returned.

“The Board of Directors has already decided to recover the money advanced to this company (CR Aviation)”, he said. As far as Mazoio was concerned, that closed the matter and there was nothing further to be said.

Mazoio also told the parliamentarians that, as from the end of the second quarter of this year, the INSS will publish its accounts, in order to make the institution’s management more transparent.

Source: AIM