Five guilty in Avid fraud trial
Avid kingpin Lazarus Kandara, Namangol CEO Nico Josea and South African investment manager Alan Rosenberg were the masterminds behind the theft of N$30 million from the Social Security Commission, the High Court has found.
At the end of the drawn-out Avid fraud trial that started in 2005 involving seven accused, the Windhoek High Court found on Friday that Nico Josea, together with the late Lazarus Kandara and South African trader Alan Rosenberg, devised a plan to swindle the Social Security Commission out of a N$30 million investment.
Josea was found guilty of theft by conversion. The court found that he was in cahoots with Kandara and Rosenberg and that he had no intention to return the N$30 million invested by the SSC in the Avid investment company.
N$28.5 million of the investment was transferred to Namangol Investments, over which Josea exercised sole control as CEO. The court found there was overwhelming evidence that during Josea's dealings with Kandara and Rosenberg he knew the SSC's money had been taken.
Judge Christie Liebenberg rejected an application by lawyer Slysken Makando, appearing for Josea, to reinstate his client's bail. He ordered that Josea be detained at the awaiting-trial section of the Windhoek Central Correctional Facility until sentencing.
Avid CEO Kandara shot himself in front of the Windhoek police station only hours after being arrested on 24 August 2005.
Three other accused - Paulus Kapia, Inez /Gâses and Ralph Blaauw - were found guilty of fraud, while Sharon Lynette Blaauw and Josea were found guilty of reckless and fraudulent conduct of business in contravention of the Companies Act. Their bail was reinstated and the case was postponed to 16 May for pre-sentencing arguments.
It was found that Sharon Blaauw on her own admission thoughtlessly signed two resolutions which had far-reaching consequences for Avid.
She pretended to have been part of the decision-making process when signing both resolutions while knowing that it was not the case.
Judge Liebenberg said Sharon Blaauw had failed in her duty as Avid director and by so doing made herself guilty of reckless conduct in contravention of the Companies Act. Lawyer Otniel Podewiltz and retired army brigadier Matias Shiweda were found not guilty.
In his two-hour judgment Judge Liebenberg said Josea's swindling of the money was mainly possible because of the manner in which he carried on the business of Namangol Investments when managing the investment. He wilfully did not make distinction between the company and himself.
The judge said the business of Namangol was carried out in a reckless manner and for fraudulent purposes, the sole intention being to appropriate funds invested with the company.
He concluded that there was insufficient proof for finding that the other accused - Paulus Kapia, Inez /Gâses, Otniel Podewiltz, Sharon Lynette Blaauw, Ralph Blaauw and Matias Shiweda - were equally aware of any intention to steal the SSC's funds or were involved in the unlawful appropriation thereof.
“Therefore in my view they cannot be held accountable for what happened to the N$30 million funds afterwards,” Liebenberg stated.
He emphasised that Josea must take full blame, for he joined forces with Kandara to hijack the investment for their personal gain.
But Liebenberg said the evidence established beyond reasonable doubt that the accused persons during the bidding stage allowed Kandara to manipulate the process and succeeded in the awarding of the tender.
“During the process they abdicated their duties and responsibilities towards Avid by consciously allowing and accommodating an outsider to abuse the company to achieve this goal,” the judge said.
In the process substantial misrepresentations were made by the accused persons to the SSC, which mostly emanated from the creative mind of Kandara and which the accused simply adopted as their own, irrespective of the consequences.
Liebenberg said those accused who made themselves guilty of fraudulent conduct each had a role to play in swaying SSC managers Avril Green, Gideon Muller and CEO Tuli Hilvelua to award the tender to Avid.
“Though they personally stood nothing to gain from it, their intentions and actions jointly satisfy the elements of the offence of fraud and they could not escape conviction,” the judge stated.
In the case of the retired army brigadier, Liebenberg he said: “There is no evidence that Shiweda during the presentation made any misrepresentations; neither has any evidence been presented as to his participation in the preparation of the shareholders' list or resolutions.”
He said there was no evidence showing that Shiweda acted with the intention to defraud any creditors.
“When he [Shiweda] afterwards became suspicious and failed to act on his suspicion, the investment deal was already done and the offence of fraud completed,” the judge said.
He added that Shiweda's failure to raise the alarm did not constitute fraud.
“The State's argument on this point is found to be without merit and Shiweda should be acquitted of reckless or fraudulent conduct of business,” the judge ruled.
FRED GOEIEMAN
Josea was found guilty of theft by conversion. The court found that he was in cahoots with Kandara and Rosenberg and that he had no intention to return the N$30 million invested by the SSC in the Avid investment company.
N$28.5 million of the investment was transferred to Namangol Investments, over which Josea exercised sole control as CEO. The court found there was overwhelming evidence that during Josea's dealings with Kandara and Rosenberg he knew the SSC's money had been taken.
Judge Christie Liebenberg rejected an application by lawyer Slysken Makando, appearing for Josea, to reinstate his client's bail. He ordered that Josea be detained at the awaiting-trial section of the Windhoek Central Correctional Facility until sentencing.
Avid CEO Kandara shot himself in front of the Windhoek police station only hours after being arrested on 24 August 2005.
Three other accused - Paulus Kapia, Inez /Gâses and Ralph Blaauw - were found guilty of fraud, while Sharon Lynette Blaauw and Josea were found guilty of reckless and fraudulent conduct of business in contravention of the Companies Act. Their bail was reinstated and the case was postponed to 16 May for pre-sentencing arguments.
It was found that Sharon Blaauw on her own admission thoughtlessly signed two resolutions which had far-reaching consequences for Avid.
She pretended to have been part of the decision-making process when signing both resolutions while knowing that it was not the case.
Judge Liebenberg said Sharon Blaauw had failed in her duty as Avid director and by so doing made herself guilty of reckless conduct in contravention of the Companies Act. Lawyer Otniel Podewiltz and retired army brigadier Matias Shiweda were found not guilty.
In his two-hour judgment Judge Liebenberg said Josea's swindling of the money was mainly possible because of the manner in which he carried on the business of Namangol Investments when managing the investment. He wilfully did not make distinction between the company and himself.
The judge said the business of Namangol was carried out in a reckless manner and for fraudulent purposes, the sole intention being to appropriate funds invested with the company.
He concluded that there was insufficient proof for finding that the other accused - Paulus Kapia, Inez /Gâses, Otniel Podewiltz, Sharon Lynette Blaauw, Ralph Blaauw and Matias Shiweda - were equally aware of any intention to steal the SSC's funds or were involved in the unlawful appropriation thereof.
“Therefore in my view they cannot be held accountable for what happened to the N$30 million funds afterwards,” Liebenberg stated.
He emphasised that Josea must take full blame, for he joined forces with Kandara to hijack the investment for their personal gain.
But Liebenberg said the evidence established beyond reasonable doubt that the accused persons during the bidding stage allowed Kandara to manipulate the process and succeeded in the awarding of the tender.
“During the process they abdicated their duties and responsibilities towards Avid by consciously allowing and accommodating an outsider to abuse the company to achieve this goal,” the judge said.
In the process substantial misrepresentations were made by the accused persons to the SSC, which mostly emanated from the creative mind of Kandara and which the accused simply adopted as their own, irrespective of the consequences.
Liebenberg said those accused who made themselves guilty of fraudulent conduct each had a role to play in swaying SSC managers Avril Green, Gideon Muller and CEO Tuli Hilvelua to award the tender to Avid.
“Though they personally stood nothing to gain from it, their intentions and actions jointly satisfy the elements of the offence of fraud and they could not escape conviction,” the judge stated.
In the case of the retired army brigadier, Liebenberg he said: “There is no evidence that Shiweda during the presentation made any misrepresentations; neither has any evidence been presented as to his participation in the preparation of the shareholders' list or resolutions.”
He said there was no evidence showing that Shiweda acted with the intention to defraud any creditors.
“When he [Shiweda] afterwards became suspicious and failed to act on his suspicion, the investment deal was already done and the offence of fraud completed,” the judge said.
He added that Shiweda's failure to raise the alarm did not constitute fraud.
“The State's argument on this point is found to be without merit and Shiweda should be acquitted of reckless or fraudulent conduct of business,” the judge ruled.
FRED GOEIEMAN
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