SME Bank liquidation appealed
The Zimbabwean shareholders of SME Bank say other options should have been considered instead of closing the “tool of upliftment”.
11 October 2018 | Banking
The Zimbabwean Metropolitan Bank and World Eagle Properties have appealed to the Supreme Court to overturn the High Court order that placed the looted SME Bank in liquidation.
The two entities claim there was a “cumulative effect” of irregularities, non-compliances and abuses of Bank of Namibia (BoN) procedures in the process of placing the SME Bank in liquidation.
The legal representatives for MetBank and World Eagle, Sisa Namandje and advocate Anthony Bishop, argued that the provisions of the Banking Institutions Act, as well as relevant provisions of the Companies Act, were neither interpreted by the High Court nor applied by the BoN.
They claimed the BoN had “elevated” the operation of the Companies Act and the Banking Institutions Act to a position superior to that of the Namibian constitution, and thereby failed to pay sufficient attention to constitutional imperatives.
They said the SME Bank’s liquidation cannot be viewed as “ordinary” because the bank was created as a “tool of upliftment” for the previously disadvantaged and was aimed at raising the living standards of Namibians.
Therefore, MetBank and World Eagle Properties - minority shareholders in the SME Bank - stated that no liquidation order ought to have been given.
They argued that a liquidation order should only have been brought by the SME Bank itself, one or more creditors or members or the Master of the High Court.
Alternatively, they said, the SME Bank should have been placed under provisional judicial management and that the Namibian government, which has a 65% shareholding, should have explained why an order for the recapitalisation of the bank was not possible or viable.
Namandje and Bishop said there were various prejudicial non-compliances in terms of the Companies Act, which they said were wrongfully rejected by the High Court.
They said the application for the final liquidation was first lodged with the Master of the High Court before it was issued to the registrar of that court, saying this meant that the entire High Court application was a nullity.
They also said the liquidators of the SME Bank, David Bruni and Ian McLaren, had not been properly appointed, and the BoN had run roughshod over provisions of the Banking Institutions Act too.
They added that when the liquidators were appointed the BoN had failed to designate a banking expert to assist them, and that all decisions taken by Bruni and McLaren were therefore invalid.
The appeal was heard by judges Sylvester Mainga, Dave Smuts and Elton Hoff on Tuesday.