GIPF trustees had bread buttered on both sides

By: TILENI MONGUDHI

A NUMBER of Government Institutions Pension Fund (GIPF) trustees have been accused of conflict of interest for granting loans to companies on which they served as directors.

The loans were given under the now defunct Development Capital Portfolio (DCP) in which GIPF lost hundreds of millions of dollars.
The Namibian is in possession of a report commissioned by the Namibia Financial Institutions Supervisory Authority (Namfisa) in which some of these non-performing loans are detailed. The report investigated the activities of the DCP and how the loans were awarded to companies.
The report points to several former and a current GIPF trustee who acted “in conflict of interest” as they did not recuse themselves from discussions pertaining to loan applications by companies on whose boards they served as directors. The report said these directors also did not declare their interest in the DCP loan applicants.
In some instances they allegedly went to the extent of motivating the applications.
Peter Nevonga, general secretary of Namibia Public Workers Union (Napwu), Steve Katjiuanjo, currently Justice Permanent Secretary and Nangula Mbako, now PS in the Office of the Prime Minister, are some of the officials who are said to have acted in conflict of interest.
Nevonga and Mbako served as trustees on the billion-dollar GIPF pension fund, while Katjiuanjo served as chairman at the time.
The conflict of interest relates to loans granted to Namibia Grape Company (NGC), Windhoek Country Club and Resort (WCCR) and Futeni Collections.
The report states that the investigators did not find the minutes of GIPF board of trustee meetings indicating that the said officials had recused themselves whenever the trustees were discussing the specific loans.
An example is the Namibia Grape Company (NGC), which was a joint venture between GIPF and several private shareholders.
Katjiuanjo was appointed director of NGC while he was chairman of GIPF. “We could not find any documentation in which he declared a conflict of interest,” the report states.
Nevonga was appointed director of the NGC on September 23 1998, while he was a GIPF trustee.
GIPF was a 96 per cent shareholder in NGC and therefore seconded some of its trustees to serve on NGC board to safeguard the GIPF interest.
However, the report suggests that Katjiuanjo and Nevonga should not have participated in discussing a loan to the company on whose board they served.
“It is our opinion that he [Katjiuanjo] should not have served in any board discussion regarding the investment.
“PT Nevonga is indicated in the minutes as attending the GIPF Board of Trustees meeting of 4 June 2003 regarding the approval of additional funding of N$3 695 096,67. There is no indication that he declared his interest and withdrew from the meeting during the discussions of the increase in the loan amount,” the Namfisa report says about Nevonga.
“We recommend that a forensic investigation be conducted into the financial and operational records of the NGC, with particular reference to the expenditure and payments, remuneration received by the chairman of the GIPF board of trustees and any other possible irregular payments in order to affect recovery of the loan amounts advanced.”
Namfisa also found it strange that the directors seconded to NGC were to be paid “from time to time” for work performed for the grape company.
“We could not find any documentation in which Mr Steve Katjiuanjo declared a conflict of interest situation and it is our opinion that he should not have been entitled to any remuneration, nor should he have served as chairman of the Board of Trustees in any future GIPF discussions regarding this investment,” the report says.
Katjiuanjo and another GIPF trustee, Leah Namuhuja-Namoloh, were also made directors of Futeni, a debt-collection company.
Katjiuanjo was made director of Futeni on December 30 2000, while Namuhuja-Namoloh became director on October 1 2001.
GIPF advanced a loan of N$11 million to Futeni in October 2001.
As in the case of NGC loans, Namfisa did not find any evidence that the two had recused themselves from GIPF trustee discussions relating to the Futeni loan.
With regard the Country Club loan of N$75 million which was guaranteed by Government, Nangula Mbako finds herself in the same position as Katjiuanjo, Nevonga and Namuhuja-Namoloh.

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