SME Bank plot thickens
The governor of the Bank of Namibia, Ipumbu Shiimi, on Wednesday wrote a letter to suspended board members of the beleaguered SME Bank in which he stated that the central bank “did not resolve to order” their removal but that they had been “disempowered”.
Shiimi added that the BoN would in due course revert to the deposed board members regarding their positions as directors of the SME Bank.
This has sparked an assertion that the BoN has made a “dramatic U-turn on its resolution to strip” the SME Bank's directors of their powers on 1 March. “[This] development does throw light on the rumblings in the corridors that governor Shiimi may not be acting in the name of the taxpayers of Namibia as he claims but could be nurturing an unhealthy obsession with the takeover of the SME Bank, an obsession that may cost the Namibian taxpayer far more than the alleged N$200 million invested in South Africa,” asserted a critic of the BoN's action against the SME Bank. Lawyer Eben de Klerk said this assertion was outrageous since the BoN was merely acting within its mandate. In accordance with Section 56(2)(b) of the Banking Institutions Act of 1998 the BoN can “assume control of the entire property, business and affairs” if it is satisfied that a banking institution is conducting its business in a manner that is detrimental to the interests of its customers and the general public.
According to De Klerk, the BoN did not even have to take a board resolution on the powers or control of the directors.
“Once BoN took control in terms of the Act the officials automatically lost control. This is in terms of Section 56 (4),” said De Klerk.
Section 56 (4) states that an officer removed “shall cease to hold the office” in the banking institution or in its affiliates or associate and “shall not be entitled to payment of any remuneration from the bank” or its affiliates or associate.
“One would have preferred judicial oversight but this Act provides such powers,” commented De Klerk.
He added: “The letter cannot be seen as a U-turn; it is a confirmation of what the law says.”
In their court challenge against their “disempowerment”, SME Bank board and management members George Simataa (chairperson), Enock Kamushinda (vice-chairperson), Ozias Bvute (director), Tawanda Mumvuma (CEO), Joseph Banda (financial manager), and Alec Gore (GM: treasury and investments), claim that the SME Bank is “currently being run unlawfully by a purported interim board of directors appointed by the BoN”.
The other members of the board, Milka Mungunda and Petrina Nakale, have not challenged their removal in court. The interim board consists of Road Fund Administration CEO Ali Ipinge, Dennis Khama, Melani Tjijenda and Fanuel Kisting. Benestus Herunga was installed as the acting CEO.
The suspended board members and executives claim that they were “removed unlawfully” and that the BoN should instead have required them to take certain action “which may not include removal or appointment of directors and officers”.
The BoN recently removed the entire board of the SME Bank as well as three executive committee members, including suspended SME Bank boss Tawanda Mumvuma. The disgraced commercial bank was placed under curatorship when Mumvuma, Bunda and Gore were found wanting when questioned on funds invested in suspicious financial instruments in South Africa.
According to the BoN, between N$181 million and N$196 million is believed to have been invested dubiously, leading to the removal of the board and the three exco members. It was also recently reported that the SME Bank funds were deposited into the Venda Building Society (VBS) Mutual Bank. Money was also placed in a cash management company called Mamepe Capital.
The report claimed there were major withdrawals after the funds had been deposited into the accounts of the two South African institutions. Despite the request to have the board reinstated, BoN refused to budge, and recently insisted that the action of central bank taken on 1 March was still in force.
CATHERINE SASMAN AND OGONE TLHAGE
Shiimi added that the BoN would in due course revert to the deposed board members regarding their positions as directors of the SME Bank.
This has sparked an assertion that the BoN has made a “dramatic U-turn on its resolution to strip” the SME Bank's directors of their powers on 1 March. “[This] development does throw light on the rumblings in the corridors that governor Shiimi may not be acting in the name of the taxpayers of Namibia as he claims but could be nurturing an unhealthy obsession with the takeover of the SME Bank, an obsession that may cost the Namibian taxpayer far more than the alleged N$200 million invested in South Africa,” asserted a critic of the BoN's action against the SME Bank. Lawyer Eben de Klerk said this assertion was outrageous since the BoN was merely acting within its mandate. In accordance with Section 56(2)(b) of the Banking Institutions Act of 1998 the BoN can “assume control of the entire property, business and affairs” if it is satisfied that a banking institution is conducting its business in a manner that is detrimental to the interests of its customers and the general public.
According to De Klerk, the BoN did not even have to take a board resolution on the powers or control of the directors.
“Once BoN took control in terms of the Act the officials automatically lost control. This is in terms of Section 56 (4),” said De Klerk.
Section 56 (4) states that an officer removed “shall cease to hold the office” in the banking institution or in its affiliates or associate and “shall not be entitled to payment of any remuneration from the bank” or its affiliates or associate.
“One would have preferred judicial oversight but this Act provides such powers,” commented De Klerk.
He added: “The letter cannot be seen as a U-turn; it is a confirmation of what the law says.”
In their court challenge against their “disempowerment”, SME Bank board and management members George Simataa (chairperson), Enock Kamushinda (vice-chairperson), Ozias Bvute (director), Tawanda Mumvuma (CEO), Joseph Banda (financial manager), and Alec Gore (GM: treasury and investments), claim that the SME Bank is “currently being run unlawfully by a purported interim board of directors appointed by the BoN”.
The other members of the board, Milka Mungunda and Petrina Nakale, have not challenged their removal in court. The interim board consists of Road Fund Administration CEO Ali Ipinge, Dennis Khama, Melani Tjijenda and Fanuel Kisting. Benestus Herunga was installed as the acting CEO.
The suspended board members and executives claim that they were “removed unlawfully” and that the BoN should instead have required them to take certain action “which may not include removal or appointment of directors and officers”.
The BoN recently removed the entire board of the SME Bank as well as three executive committee members, including suspended SME Bank boss Tawanda Mumvuma. The disgraced commercial bank was placed under curatorship when Mumvuma, Bunda and Gore were found wanting when questioned on funds invested in suspicious financial instruments in South Africa.
According to the BoN, between N$181 million and N$196 million is believed to have been invested dubiously, leading to the removal of the board and the three exco members. It was also recently reported that the SME Bank funds were deposited into the Venda Building Society (VBS) Mutual Bank. Money was also placed in a cash management company called Mamepe Capital.
The report claimed there were major withdrawals after the funds had been deposited into the accounts of the two South African institutions. Despite the request to have the board reinstated, BoN refused to budge, and recently insisted that the action of central bank taken on 1 March was still in force.
CATHERINE SASMAN AND OGONE TLHAGE
Comments
Namibian Sun
No comments have been left on this article