Another victory for SME Bank liquidators
An amount of N$11.5 million held by a South African stockbroker has been frozen.
The SME Bank's provisional liquidators had another victory when the South African High Court ruled that the institutional brokerage firm Peregrine Equity may not release any payments to companies investigated in connection with the demise of the bank.
The Gauteng Division of the High Court on 3 September ordered that Peregrine may not pay out N$11.5 million to Mamepe Capital Investments and Mauwane Kotane from an account held in the name of a company called KE2 Ample.
Former SME Bank CEO Tawanda Mumvuma, without board approval, invested N$196 million with Kotane's Mamepe Capital, which allegedly was divested to VBS Mutual Bank that is currently under curatorship over internal looting.
This new victory follows hot on the heels of an earlier one towards the end of August, when the liquidators, David Bruni and Ian McLaren, were able to convince the Gauteng high court to freeze N$43.8 million held in Moody Blue and AMFS Solutions.
Some of the SME Bank's money invested with Mamepe Capital had been funnelled to the Moody Blue and AMFS Solutions FNB banking accounts. While the liquidators are intensifying their search for the missing SME Bank millions, Kotane as the CEO of Mamepe Capital has been subpoenaed to appear before the commission of inquiry in Namibia chaired by Advocate Natasha Bassingthwaighte.
This commission was instituted by Windhoek High Court to solicit information concerning the dealings and transactions between the SME Bank and a number of entities, including Mamepe Capital.
The relationship
In a document before the Gauteng High Court, Kotane set out his “relationship and transactions” between Mamepe Capital and the SME Bank between January 2014 and 31 May 2017.
In this document Kotane said Mamepe Capital had been approached by the former SME Bank CEO, Tawanda Mumvuma, in 2013 to help the bank to “maximise returns” on its funds and to provide advisory services.
Kotane said Mamepe Capital was chosen for its “flexible innovation” and “willingness to explore parallel alternatives”. He said Mamepe and the bank signed a memorandum of understanding (MoU) on 7 January 2014, which specified that Mamepe would, among other things, raise capital, advise and provide asset management and private equity services to the bank.
He said funds were transferred at the will of the SME Bank into 11 nominee accounts at different banks in South Africa, as it required that invested funds be held separately from Mamepe Capital funds.
Kotane said these funds were classified as money market instruments from March 2014 until August 2016.
He said by the end of July 2016 the portfolio balance was N$217 million, comprised of a capital balance of N$195 million and an interest balance of N$22 million. During August 2016 and September 2016 the SME Bank had apparently then invested, from the initial capital balance, an amount of N$175 million in the money market portfolio on commodities.
Kotane said the N$175 million was invested in a consumable product, fertilisers, with the Lebanese company, Rawfert Offshore Sal, operating in Zimbabwe. This investment, Kotane said, was purely for trading purposes.
He said contrary to allegations of fraud and theft, the funds were held and invested “safely” by Mamepe Capital and that the funds were received lawfully and legitimately in terms of a legally binding agreement signed on 7 January 2014 and the MoU signed on 27 July 2016.
“It is both disingenuous and unfortunate to allege that the funds form part of an investigation of fraud, theft and the contraventions of the [Prevention of Organised Crime Act] (POCA) Act when in fact SME Bank is in possession of all the agreements as well as correspondence between ourselves and those in relation to this transaction,” Kotane said.
CATHERINE SASMAN
The Gauteng Division of the High Court on 3 September ordered that Peregrine may not pay out N$11.5 million to Mamepe Capital Investments and Mauwane Kotane from an account held in the name of a company called KE2 Ample.
Former SME Bank CEO Tawanda Mumvuma, without board approval, invested N$196 million with Kotane's Mamepe Capital, which allegedly was divested to VBS Mutual Bank that is currently under curatorship over internal looting.
This new victory follows hot on the heels of an earlier one towards the end of August, when the liquidators, David Bruni and Ian McLaren, were able to convince the Gauteng high court to freeze N$43.8 million held in Moody Blue and AMFS Solutions.
Some of the SME Bank's money invested with Mamepe Capital had been funnelled to the Moody Blue and AMFS Solutions FNB banking accounts. While the liquidators are intensifying their search for the missing SME Bank millions, Kotane as the CEO of Mamepe Capital has been subpoenaed to appear before the commission of inquiry in Namibia chaired by Advocate Natasha Bassingthwaighte.
This commission was instituted by Windhoek High Court to solicit information concerning the dealings and transactions between the SME Bank and a number of entities, including Mamepe Capital.
The relationship
In a document before the Gauteng High Court, Kotane set out his “relationship and transactions” between Mamepe Capital and the SME Bank between January 2014 and 31 May 2017.
In this document Kotane said Mamepe Capital had been approached by the former SME Bank CEO, Tawanda Mumvuma, in 2013 to help the bank to “maximise returns” on its funds and to provide advisory services.
Kotane said Mamepe Capital was chosen for its “flexible innovation” and “willingness to explore parallel alternatives”. He said Mamepe and the bank signed a memorandum of understanding (MoU) on 7 January 2014, which specified that Mamepe would, among other things, raise capital, advise and provide asset management and private equity services to the bank.
He said funds were transferred at the will of the SME Bank into 11 nominee accounts at different banks in South Africa, as it required that invested funds be held separately from Mamepe Capital funds.
Kotane said these funds were classified as money market instruments from March 2014 until August 2016.
He said by the end of July 2016 the portfolio balance was N$217 million, comprised of a capital balance of N$195 million and an interest balance of N$22 million. During August 2016 and September 2016 the SME Bank had apparently then invested, from the initial capital balance, an amount of N$175 million in the money market portfolio on commodities.
Kotane said the N$175 million was invested in a consumable product, fertilisers, with the Lebanese company, Rawfert Offshore Sal, operating in Zimbabwe. This investment, Kotane said, was purely for trading purposes.
He said contrary to allegations of fraud and theft, the funds were held and invested “safely” by Mamepe Capital and that the funds were received lawfully and legitimately in terms of a legally binding agreement signed on 7 January 2014 and the MoU signed on 27 July 2016.
“It is both disingenuous and unfortunate to allege that the funds form part of an investigation of fraud, theft and the contraventions of the [Prevention of Organised Crime Act] (POCA) Act when in fact SME Bank is in possession of all the agreements as well as correspondence between ourselves and those in relation to this transaction,” Kotane said.
CATHERINE SASMAN
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