Nevonga’s grape firm milked Government pension fund

By: JO-MARÉ DUDDY

DESPITE knowing that there was no financial control at the Namibia Grape Company (NGC), the Government Institutions Pension Fund (GIPF), between 1998 and 1999, still gave the company nearly N$8,7 million more than the N$56 million it originally approved.

In April 2000, Investec Asset Management wrote to the GIPF Chairman at the time, saying: “... whatever the reasons ... I am, as stated to your board [of trustees] before, extremely embarrassed by the fact that N$65 million was paid out to NGC without GIPF authorisation.”

The Investec corres-pondence, contained in a confidential report, following an independent Namibia Financial Institutions Supervisory Authority (Namfisa) investigation in May 2000 continued: “Investec paid over N$65 million to the NGC, while the GIPF Board had at that stage authorised an investment of N$56 million. As the NGC ran out of funds, the board decided to continue supporting the project and has approved further advances to the NGC. The amount in question is thus an advance of approximately N$9 million which remains unauthorised to date.”

To cover its tracks, the GIPF and NGC in March 2001 signed an addendum to increase the loan to N$65 million. The Namfisa investigators, however, could find no board minutes in which the additional loan was approved.

GIPF funds continued flowing despite the 1999 financial statements warning of no financial control.

In it, the auditors stated: “There was no system of control over expenses and payments on which we could rely for the purpose of our audit, and there were no satisfactory auditing procedures which we could perform, to obtain reasonable assurance that all the related transactions, and balances, were valid and accurately recorded.”

NGC milked the GIPF’s Development Capital Portfolio (DCP) to the tune of N$164,6 million up to 2004. According to a GIPF report in May this year, NGC in fact owed N$313,5 million, if interest and penalty fees are added.

The company did not repay a cent.

The GIPF managed to get N$56 million – not even 18 per cent of what it was owed – back when it sold the company to the National Youth Service in 2007.

Besides calling for a full forensic investigation, the Namfisa report also expressed concern over conflict of interest in the NGC deal. In this regard it singled out Peter Nevonga, General Secretary of Namibia Public Workers Union (Napwu), and Steve Katjiuanjo, currently Justice Permanent Secretary.

Both Nevonga and Katjiuanjo served on the GIPF board of trustees and were paid directors of NGC.

In 2001, Katjiuano chaired a board meeting at which he asked for additional capital of N$6,6 million for the NGC.

According to the Namfisa report, the board “expressed concern about the escalating request for funds. It was also stated that this problem is attributed to a top-heavy structure of the NGC, which often results in financial implications”.

The board nevertheless approved the N$6,6 million without a loan agreement.

In 2003, Nevonga asked for another N$3,7 million during a trustee meeting. “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 stated.

Other irregularities pointed out by the Namfisa report include the absence of due diligence, incomplete or no loan agreements, and no board minutes for several pay-outs.

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