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Friday, April 26, 2002 - Web posted at 7:31:35 pm GMT N$4m in Govt workers' pension money goes down the drainWERNER MENGESTHE loss of some N$4 million in civil servants' pension money was confirmed this week when a bankrupt investment company was liquidated. In terms of the order granted by Judge Annel Silungwe on Monday, the Namibian Asset Finance Company (Namafco) is now finally liquidated. The Government Institutions Pension Fund (GIPF) had invested N$4 million with the company. Phillip van Heerden, the former Chief Executive Officer of HSBC Securities Namibia who resigned from the prestigious investment bank under a cloud in January, was one of the major shareholders and a director of Namafco. His resignation came only weeks after he had been suspended by HSBC, with this in turn following a GIPF instruction for its local portfolio managers to suspend all dealings with HSBC Securities Namibia. The GIPF directive was sent out on November 30 last year, a day after Namafco failed to pay back N$4 million plus interest in GIPF money invested with it. The GIPF had invested the money through one of its portfolio managers, Namibia Asset Management (NAM), in the now-fallen company. This was done on November 27 1996 and January 20 1998 respectively, with N$2 million invested in the company on each occasion. Namafco was supposed to pay back interest on the investments, which were placed with it in the form of debentures (long-term securities yielding a fixed rate of interest). But, while millions in public servants' pension funds were being entrusted to Namafco, the company was effectively in a shambles, a subsequent auditor's investigation revealed. GIPF Chief Executive Officer Primus Hango stated in an affidavit filed in support of the liquidation application that by the end of April last year Namafco was some N$249 000 in arrears in interest payments on the one debenture, and some N$214 500 in arrears in interest payments on the other debenture. It was at that time that auditors Stier Henke Associates issued an alarming report on the company. The auditors reported on April 30 last year that they could not find any of the company's accounting records, except for some repayment schedules, while no tax returns had been done either. They further reported that at the end of November 2000, Namafco had already accumulated losses of N$3,029 million. The company is "totally insolvent", the auditors reported. Some of the major losses were incurred when Namafco financed the operational expenses of Ocean Crustacea, a company of which Kaufmann was a director, to the tune of some N$1,9 million at a time when commercial bankers no longer wanted to extend money to the company. It has since been placed in liquidation. Relying on the auditors' report, Hango went for the jugular in attacking the conduct of Namafco's principals. The directors, Van Heerden and Kaufmann, also withdrew money from Namafco for themselves "in a reckless and uncontrolled manner", with Kaufmann for example withdrawing N$1,118 million, Hango charged. The entire amount of his loan account with the company is now shown as a loss, Hango stated. Kaufmann has since left Namibia permanently, he claimed. By March last year it had been paid back partly, with some N$330 000 remaining outstanding. Hango charged that Namafco had traded "recklessly and under insolvent circumstances", and that its former directors were guilty of "reckless of delinquent behaviour" which directly placed the GIPF's investments at risk. Stier Henke Associates' conclusion in their damning report on Namafco was that both Van Heerden and Kaufmann, who worked from the same premises, must have been fully aware of each other's actions. They should be held fully liable jointly and severally for the company's failure and loss of investors' money, the auditors recommended. |
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