THE National Pension Scheme Authority (NAPSA) is winding up a purchase transaction of Chrismar Hotel, a Lusaka based business that is owned by President Edgar Lungu’s close friend Valden Findlay.
In August this year, News Diggers published a story revealing that NAPSA was facing political pressure to buy the Hotel, but the Pension Authority vehemently denied having made a decision to buy the property and rubbished the story as fake news.
But according to correspondence seen by News Diggers, NAPSA wrote to Chrismar Hotel seeking to renegotiate the deal after the board approved the decision to buy the hotel.
In a letter addressed to Haberton Limited managing director, NAPSA Director General Yollard Kachinda stated that the Authority was inviting the hotel for re-negotiations on the offer price for land and buildings only.
“Dear Sir, Re: Negotiation for the purchase of plot number 6982 in Lusaka. Further to the negotiation meeting of 12th June, 2020, over the purchase of plot number 6982 in Lusaka (refer to copy of minutes herewith attached for the ease of reference), we write to advise that the offer of current hotel business aspect of the transactions by yourselves and the consideration thereof by the NAPSA negotiating team was outside your initial offer and subsequent approval by the NAPSA board of trustees,” read the letter.
“Kindly note that the NAPSA board of trustees approval was for the purchase of land and buildings only and was based on your offer, hence did not include the current hotel business, which would have required specialised due diligence if it was part of your initial offer. In this regard, and in order to comply with the NAPSA board of trustees’ approval, we hereby invite you for re-negotiating on your offer price for land and buildings only.”
According to sources, NAPSA failed to resist political pressure to buy the hotel.
“This is never went away, at the time when you were writing the story that there was a intention to buy the hotel, the negotiations had reached an advanced stage. Right now, the purchase is almost done and all the negotiations were concluded. So we have a situation were NAPSA will be spending millions of dollars worth of people’s pension contributions used on a business that does not make sense at all,” said the sources.
NAPSA has previously confirmed to News Diggers! that it received an offer for the sale of the property, which is located at plot number 6892 Los Angeles Boulevard in Lusaka, but said the decision to go ahead with the investment was not made.
Impeccable sources revealed that Findlay, who is President Edgar Lungu’s close associate and business partner, was in the process of liquidating some of his assets, including Chrismar Hotel but at inflated valuations.
“What we know is that three valuations were done on Chrismar Hotel, claiming that the property is worth US $10 million, US $11 million and US $18 million, respectively. So, the general feeling is that it has been too overpriced, but there is pressure for NAPSA to buy the hotel. There seems to be too much pressure coming from government, even when the value that has been attached just doesn’t make sense,” sources said.
On Wednesday, August 12, NAPSA issued a statement, rubbishing rumours that the Pensions Authority had bought the hotel, saying the report was fake news.
“The National Pension Scheme Authority (NAPSA) is aware of a story circulating in some circles purporting that NAPSA has purchased Chrismar Hotel. The Authority wishes to categorically state that it has not purchased the named firm. Therefore, the story must be discarded as fake news,” stated head of corporate affairs Cephas Sinyangwe.
But News Diggers! wrote a detailed query asking: What procedure NAPSA follows before making investments; if NAPSA had done a cost benefit analysis before making a consideration to procure the property; if it was true that three overpriced valuations were done on the property, placing the value at US $10 million, US $11 million and US $18 million; what NAPSA intended to use the property for; if the board was under external pressure to make the procurement decision; and if it was of concern to NAPSA that the property in question belonged to Findlay, a close friend of President Lungu, and that the values being discussed had no relationship with commercial sense.
In response to the News Diggers! query, NAPSA confirmed receiving the offer of sale for Chrismar Hotel, adding that the offer was among hundreds of others, which came as a result of a call for proposals made last year.
“In July, 2019, the National Pension Scheme Authority advertised a call for investment proposals (NAPSACIP/DI//1). (Refer to attached document). The aim of the call was to give both public and private sector players an equal opportunity to present viable investment proposals to the Authority. Hundreds of proposals were received. The proposal referred to in your query came through the same process,” stated Sinyangwe.
“All the proposals that were received were processed in accordance with the Authority’s Investments and operational guidelines, asset allocation, Statement of Investment Policy and Investment Strategy 2018 to 2021. I would like to state that the proposal referred to has not been approved.”