GIPF breaks silence on loan saga

10 September 2019 | Crime

The CEO and principal officer of the Government Institutions Pension Fund (GIPF), David Nuyoma, says the fund had from the outset given its full cooperation in the investigation into non-performing loans under its Development Capital Portfolio (DCP) loan scheme.

Millions of dollars are yet to be repaid.

Nuyoma was responding to Prosecutor-General Martha Imalwa's unexpected announcement recently that she will not prosecute in the majority of cases that have been under investigation for 10 years, reportedly due to lost documents or a lack of evidence.

The DCP matter was sub judice until 21 August and now the PG has pronounced that she will only prosecute two cases. The first prosecution is expected in October.

Nuyoma, however, said he does not know which cases are to be pursued.

“It is difficult to comment on the PG's memory. I have not seen her for many years. It is difficult to know what she is saying. The GIFP has provided whatever it thought could be helpful,” Nuyoma said yesterday at a press briefing.

He said the GIPF had given the police and forensic investigations nearly 200 ledger files dealing with the DCP loans. “We want this matter to be closed and we are still willing to provide information on whatever file,” Nuyoma said.

He said the PG's pronouncement does not in any way affect the fund's investments and operational philosophy.

“[The] fund remains in a healthy and sound position,” Nuyoma said.

He said the GIPF has learnt hard and valuable lessons from the DCP loan scheme and has since “strengthened on the weak investment governance that prevailed at the time”.

Not a single director, board of trustee or defaulting DCP lender has so far been brought to book despite the GIPF having laid a criminal case with the police.

Nuyoma said from these lessons, subsequent unlisted investment programmes are now ring-fenced and managed by professional managers. To date, the GIPF has committed N$6.9 billion to unlisted assets. The fund's assets have grown to about N$120 billion as of 1 April.

DCP loan scheme

The loans were taken out during 1995 to 2005 when the GIPF disbursed a total of N$661.2 million to 21 companies by way of equity and debt.

Nuyoma said some of the companies experienced difficulties, either through poor management, poor governance and negative changes in the business environment. In 2005 the GIPF put a moratorium on the loan scheme, to ensure proper divestiture of the 21 companies, which was followed by a number of investigations into the DCP.

To date, most of the DCP investments have been disposed of or written off, with the exception of three performing loans. These are the Etosha Fisheries, FNB Holdings Namibia and Bank Windhoek loans.

Given the three performing loans the GIPF still holds today, the total unrealised gain by the end of March this year stood at N$988.7 million.

Similarly, by the end of March this year, 12 of the 21 investments incurred losses of N$386.6 million, and a total of N$1.1 billion was collected in the form of dividends and interest and capital repayments.

Nuyoma said the GIPF exited from the 12 companies that failed to perform “in a responsible, way under the circumstances prevailing at the time”.

Six companies were liquidated, either at the insistence of the GIPF or other creditors, or through voluntary liquidation.

Zero returns

Three companies have completely failed to repay anything on their DCP loans. Among these is Tsogang Investments (Pty) Ltd, set up as a special purpose vehicle to acquire a 12% shareholding in the !Uri !Khubis Abattoir at Witvlei. It received N$5 million from the DCP loan scheme. Omina Investments (Pty) Ltd, which received N$12 million, also failed to pay a cent.

Coen Wium, formerly described as the late Aaron Mushimba's right-hand man, was involved in both the Witvlei abattoir and Omina.

The third company is Sepiolite Production (Pty) Ltd, which received N$10 million. Former president Sam Nujoma's son-on-law, David Iimbili, was involved with this company.

Only some paid

The two companies that “inflicted the heaviest losses” on the DCP scheme was the Namibia Grape Company (NGC) and the //Karas Abattoir and Tannery, formerly known as Ostrich Production Namibia.

The NGC got N$164.6 million and only repaid N$56 million.

The //Karas abattoir got N$179 million and only N$18.5 million was recouped.

Ongopolo Mining and Processing has repaid N$50.4 million of its N$70 million loan. The GIPF has since acquired shares in Weatherly International, which took over the company. Namibia Pig Farm (Pty) Ltd got N$26.4 million and repaid N$9.8 million.

Omaheke Tannery & Leather Processing only returned N$2 million of its N$23 million loan.

Six performing and

exited loans

The Namibia Housing Enterprise (NHE) got collateral of N$15.8 million and has repaid all money.

Mushimba's Windhoek Country Club & Resort repaid N$142.9 million of its N$120 million loan. Its sister company, the Swakopmund Station Hotel, repaid N$40 million of its N$40 million loan.

Multiline Investments (Pty) Ltd, which received N$20 million, has repaid N$23.3 million, which includes interest, and Tutunge Investments (Pty) Ltd, which received N$4.6 million, has repaid N$5.6 million.

Preferred Management Services, which received a N$7 million revolving credit facility, has repaid this in full.

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