Irregularity flagged over N$12m GIPF investment

Irregularities of ‘probable fraudulent payments’ and ‘tax evasion’ involving N$12 million belonging to the Government Institutions Pension Fund (GIPF) has been reported to the Namibia Financial Institutions Supervisory Authority (Namfisa) and Public Accountants and Auditors Board (PAAB).

The money was invested in Amazing Kids Private School and Academy for the construction of its northern campus.

The school’s external auditors Mac & Associates reported to PAAB, as required of all registered auditors in the country, alleged irregularities in Myrtle Growth Capital’s conduct with regards to the monies it was investing on behalf of GIPF in the school.

A source said: “The school is being used as a conduit to get money from GIPF and such money is being used for things other than the official aim for which it was allocated”.

“Auditors have detected money has been diverted elsewhere but they couldn’t establish who was paid.”

On its part, PAAB said it reported the irregularity in November 2021 to Namfisa, GIPF and the Namibia Revenue Agency, its head of secretariat Zaa Nashandi confirmed.

“The material irregularity related to probable fraudulent payments for work not done and probable VAT and income tax evasion,” he told Namibian Sun last week when contacted for confirmation.

He added that PAAB’s mandate ends once the matter has been reported to relevant authorities.

Debt write-off

GIPF invested N$29.7 million in then Musa Capital, which has since become Myrtle Group, through its Namibia Mid-Capital Fund. In its native South Africa, Musa Capital has been placed on business rescue after requesting a debt write-off amounting to a N$22.6 billion loan.

At the time of investing in Amazing Kids, the Development Bank of Namibia was the primary financier, and funding was complemented by equity funding through the Namibia Mid-Capital Fund.

Myrtle Growth Capital Fund has denied syphoning money out of Namibia intended for investment in the high-end private school, insisting every cent is accounted for.

Red flags

Affirmative Repositioning (AR) movement activist Job Amupanda raised red flags last week when he claimed that Musa Capital had syphoned money - handed to it by the GIPF - out of Namibia.

In his claim, Amupanda alleged that N$12 million allocated for the construction of the school’s campus is unaccounted for.

“They got N$12 million to build a campus in the north. This campus has not been built but money seemingly disappeared. Both GIPF and Namfisa are aware but silent,” the former Windhoek mayor said.

No money squandered

Myrtle Group managing director Jerome Mouton denied the allegations, saying the fund followed due procedure to invest the money it manages on behalf of the GIPF.

According to him, the money meant for the construction of the school is currently parked, pending the approval of the school’s board.

“The full amount of the invested capital has been utilised according to the approved investment plan and has been accounted for in the annual financial statements of the school. The northern expansion was intentionally delayed due to Covid-19. The funds are available when the [school] board of directors deems appropriate,” he said.

We have been assured, GIPF says

Meanwhile, GIPF said it has mechanisms to spot any questionable investments of money it mandated fund managers to grow.

“We have been assured that the funds earmarked for the expansion of the northern campus, though not deployed due to delays, are safe,” its spokesperson Edwin Tjiramba told Namibian Sun.

Questions to Namfisa, which regulates Myrtle Growth Capital as an unlisted investment manager, went unanswered.