NEWS - NAMIBIA
| 2013-08-13SME Bank woes drag on
Tileni Mongudhi
THE Ministry of Trade and Industry will renegotiate its stake in the SME Bank and change the current shareholding structure which does not comply with the law and disadvantages government.
Ministry of Trade and Industry sources told The Namibian that the decision to renegotiate was made on Wednesday after Minister Calle Schlettwein called his management team to discuss thorny issues regarding the SME Bank.
Schlettwein confirmed the Wednesday meeting but refused to give further details stating that the internal meeting was intended to push the SME Bank to fulfill its mandate, “which is to serve SME development in the country.”
The meeting resolved that the SME Bank shareholding structure should be changed to either reflect how much money each of the parties invested into the business or that the Zimbabwean partners should dilute their shares and give them to the Namibian government.
The Namibia Financing
Trust, which holds government shares of 65% in the SME Bank, is putting up assets worth more than N$145 million as start-up capital into the venture. Apart from investing N$45 million to buy the building, which the SME bank operates from, it also has over N$100 million left, an amount which was transferred from the now closed Credit Guarantee Scheme.
The Namibian understands that the Zimbabwean partners raised start-up capital of about N$25 million, which is what the Bank has been using for its day-to-day operations. (The Metropolitan Bank of Zimbabwe holds a 30% stake and Zimbabwean businessman Enoch Kamushinda holds the remaining five percent through his company World Eagle.)
Government’s assets have not yet been transferred to the SME Bank due to legal implications. Trade and Industry sources said that the Namibia Financing Trust is registered as a Section 21 company. By law, a section 21 company, a non-profit entity, cannot transfer assets to a commercial company. Government is currently seeking legal advice on how to transfer the assets to the SME Bank.
At Wednesday’s meeting, it was also revealed that the Ministry as the shareholder was not happy with the management structure at the SME Bank and that it was not approved by the board. The meeting then resolved that the Bank’s board and management must be compelled to start providing Trade minister Schlettwein with monthly reports on the bank’s progress.
SME Bank Chairperson Frans Kapofi said he does not want to talk to The Namibian reporter.
Last week, The Namibian reported that the Bank of Namibia stopped awarding the financial institution a banking license in 2010 because one of the bank’s linchpin, Enoch Kamushinda, was deemed to “lack integrity” and to have no “respect for corporate governance”.
Ministry of Trade and Industry sources told The Namibian that the decision to renegotiate was made on Wednesday after Minister Calle Schlettwein called his management team to discuss thorny issues regarding the SME Bank.
Schlettwein confirmed the Wednesday meeting but refused to give further details stating that the internal meeting was intended to push the SME Bank to fulfill its mandate, “which is to serve SME development in the country.”
The meeting resolved that the SME Bank shareholding structure should be changed to either reflect how much money each of the parties invested into the business or that the Zimbabwean partners should dilute their shares and give them to the Namibian government.
The Namibia Financing
Trust, which holds government shares of 65% in the SME Bank, is putting up assets worth more than N$145 million as start-up capital into the venture. Apart from investing N$45 million to buy the building, which the SME bank operates from, it also has over N$100 million left, an amount which was transferred from the now closed Credit Guarantee Scheme.
The Namibian understands that the Zimbabwean partners raised start-up capital of about N$25 million, which is what the Bank has been using for its day-to-day operations. (The Metropolitan Bank of Zimbabwe holds a 30% stake and Zimbabwean businessman Enoch Kamushinda holds the remaining five percent through his company World Eagle.)
Government’s assets have not yet been transferred to the SME Bank due to legal implications. Trade and Industry sources said that the Namibia Financing Trust is registered as a Section 21 company. By law, a section 21 company, a non-profit entity, cannot transfer assets to a commercial company. Government is currently seeking legal advice on how to transfer the assets to the SME Bank.
At Wednesday’s meeting, it was also revealed that the Ministry as the shareholder was not happy with the management structure at the SME Bank and that it was not approved by the board. The meeting then resolved that the Bank’s board and management must be compelled to start providing Trade minister Schlettwein with monthly reports on the bank’s progress.
SME Bank Chairperson Frans Kapofi said he does not want to talk to The Namibian reporter.
Last week, The Namibian reported that the Bank of Namibia stopped awarding the financial institution a banking license in 2010 because one of the bank’s linchpin, Enoch Kamushinda, was deemed to “lack integrity” and to have no “respect for corporate governance”.
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