Dubious SME Bank investments laid bare

OGONE TLHAGE

Once championed by President Hage Geingob, the SME Bank has been placed under curatorship because of questionable investment in South African financial instruments.

Implicated in the saga is cabinet secretary George Simataa, who is the chairperson of the partially government-owned bank’s board, along with his fellow board members and three exco members including former chief executive officer Tawanda Mumvuma.

The Bank of Namibia has appointed a new board as well as a chief executive officer while investigations into the matter continue, central bank governor Iipumbu Shiimi announced yesterday.

According to Shiimi, between N$181 million and N$196 million was invested in questionable financial instruments in South Africa.

“The Bank of Namibia’s considered view is that such investments have the potential to cause instability if they are verified to be unsound.

“The Bank of Namibia has assumed control of the operations of the SME Bank to allow for an objective and thorough assessment of the investment portfolio of the SME Bank to make a full determination of the soundness of these investments.”

According to Shiimi, the answers given by the implicated persons were not satisfactory and resulted in their suspension.

He added: “We have not pronounced the suspended guilty, that is the duty of the courts.”

The interim board members are Dennis Khama, Melani Tjijenda, Ali Ipinge and Fanuel Kisting, while Benustus Herunga takes the helm as CEO.

“The board of the SME Bank and the CEO will work closely with the dedicated staff members of the SME Bank to ensure the institution continues to deliver on its mandate,” Shiimi said.

“It is also important to note that the SME Bank will continue to operate during the time the Bank of Namibia assumes control. The management in place will make decisions regarding the continued granting of loans and banking activities, based on the existing policies and procedures in place.

“Further, the SME Bank transactions, including ATM and online platforms, will be available and fully operational.”

Shiimi assured the public that depositors would have full access to their money in the ordinary course of doing business.

“The Bank of Namibia undertakes to restore ownership of the SME Bank within the shortest time possible,” he said.

Minister of economic planning Tom Alweendo voiced concern about operations at the SME Bank in August 2016.

Alweendo, a former governor of the central bank, said at the time: “We can admit that the SME Bank is not doing what it is intended to do. We are very aware of that. It could well mean strengthening the management.”

Just last year, it was revealed that the SME Bank had incurred N$182 million in losses since its inception and had not been paying taxes since 2012.

The bank’s financial results were delayed at the time and were in stark contrast to governance rules which encourage the publishing of results three months after the financial year-end.

Another concern raised by the BoN is that Zimbabwean businessman, Enock Kamushinda has been allowed to own a 5% stake in the commercial bank despite being blacklisted by the Anti-Corruption Trust of Southern Africa.

Just recently, the SME Bank was chosen to administer N$11 million given to the so-called struggle children. The money was drawn from the reserves of the Social Security Commission of Namibia. President Hage Geingob signed off the transaction.

The SME Bank is majority owned by the government of Namibia, which holds a 65% stake through the Ministry of Industrialisation, Trade and SME Development. Kamushinda holds a 5% stake and the remainder is held by Metbank of Zimbabwe.