Maputo — The Chairperson of Board of Directors of the National Social Security Institute (INSS), Inocencio Matavele, formally resigned on Thursday during a meeting with Labour Minister Helena Taipo.

According to the electronic news sheet "Mediafax" his resignation was prompted by stories circulating in the media accusing Matavele and the Board of gross mismanagement.

Last week it was reported that INSS had spent 100,000 US dollars buying a house in Matola for its executive director, Rogeria Muianga, and another 300,000 dollars on its refurbishment.

INSS was also the target of criticism earlier this year when it was revealed that it planned to spend a million dollars to buy "a decent house" for its chairperson.

Matavele requested the meeting to formally hand in his resignation because the resignation letter he sent to the minister's office on Monday afternoon was unanswered.

It is likely that the letter is yet to reach the Prime Minister, who has to approve Matavele's resignation, because he is currently on a working visit to the northern province of Cabo Delgado.

As for Rogeria Muianga, it is highly likely that she will also resign.

The latest scandal in INSS was triggered when it awarded a 25 million meticais (about 900,000 dollars) contract to the company Ntuzi Investments to supply stationary and information material.

This sum is said to be five times higher than bids from its competitors. This forced the minister to cancel the tender on the grounds that there was a violation of the legal requirements concerning tenders.

However, people close to the tender have argued that all the legal and administrative procedures were followed to the letter, and that there were no grounds for the tender to be cancelled.

In a related development, the Executive Committee of the main trade union federation, OTM, has convened an extraordinary meeting for Monday to discuss the financial scandals at INSS.

This decision was made on Thursday during a meeting of the OTM's leadership, which expressed its concern at what it calls "superfluous spending" and waste of taxpayers' money on perks.

"We are concerned about how workers' money is being spent. We are aware of expenditures on perks and overspending on unnecessary materials, which we condemn", said Boaventura Mondlane, a member of the OTM board.

OTM has a representative on the INSS Board of Directors. However, Mondlane explained that "our member is not involved in financial management".

According to the daily newspaper "O Pais" the Attorney General, Augusto Paulino, has announced that he will appoint a team to investigate the tender and allegations of INSS mismanagement. Paulino has ordered all files relating to INSS to be delivered to the Attorney General's Office.