Avid money hunt starts

A NAME that featured prominently during the Presidential Commission of Enquiry into the activities of the Social Security Commission in 2003 was thrust centre stage when a High Court enquiry on a soured N$30 million SSC investment got under way yesterday.

The name is that of Lazarus Kandara. He acted as the Chief Executive Officer of an upstart investment company, Avid Investment Corporation, without being officially appointed to the post.In the process, he appears to have skimmed N$3,2 million in cash off a N$30 million investment the SSC channelled through Avid, Acting Judge Raymond Heathcote heard in testimony yesterday.The public galleries of the courtroom were packed to capacity for most of the proceedings.Early in the morning already, when Kandara’s name had swiftly become a constant theme in information given to Acting Judge Heathcote, those in court could hear the Acting Judge direct that a subpoena be issued for Kandara to attend the enquiry from today.Avid Investment Corporation, to which the SSC entrusted the N$30 million for a four-month investment period in late January, has been unable to repay the money since late May.The company in effect was a one-man-show, and that one man was Lazarus Kandara, it emerged from the testimony of the first two witnesses to testify before Acting Judge Heathcote in a Companies Act enquiry over the N$30-million investment.Kandara’s name also cropped up during the sessions of the Presidential Commission of Enquiry into the affairs of the SSC in late 2002 and early 2003.That Commission was told that he had managed to persuade the SSC to spend millions of Namibia dollars on life assurance policies that had not been properly authorised by the SSC.In the process, Kandara, who worked in tandem with an experienced insurance broker because he himself was not a registered broker, earned commissions in excess of N$5 million together with his partner.EMPTY OFFICE The first person to answer questions from Acting Judge Heathcote, was Ian McLaren, one of the liquidators appointed to manage the affairs of the provisionally-liquidated Avid.He told the court that he had asked someone from the Deputy Sheriff’s offices to visit Avid’s offices last Friday (July 15) to seize all relevant material.”He found not one single piece of paper in the entire office,” McLaren reported.The evidence of the second witness, Inez /Gâses, might have provided one possible explanation for this./Gâses, who had been the Chairperson of the Avid board of directors, told the court that she had resigned as a director with effect from June 1, but that her resignation had still not been registered.Avid simply never kept proper financial books, and had never had any financial audit done, /Gâses stated.It also did not keep records of the minutes of board meetings, she said, explaining: “The administrative side of the company was never done.”Yet this was a company which managed to persuade the SSC to give it N$30 million to invest on the SSC’s behalf.According to documents already before the court, that investment was supposed to be for four months only, and was supposed to be kept safely in a highly-rated bank in South Africa.N$30 million was transferred from the SSC’s bank account into that of Avid on January 26 for that purpose.But according to the first witness in the enquiry, Nico Josea, who identified himself as the Chief Executive Officer of a Namibian asset management company, Namangol Investments, Lazarus Kandara had transferred only N$29,5 million from Avid to Namangol’s bank account on January 28.Kandara was acting on behalf of Avid, and his request was that Josea had to transfer N$20 million of that money to a financial trader, Alan Rosenberg, that Josea had previously dealt with, Josea said.Josea had to invest a further N$6,3 million in London; this was done for a year, and that investment is set to mature on February 26 next year, he said.Kandara asked for the remaining N$3,2 million to be returned to him in cash, Josea related.The money was returned to Kandara, according to Josea.He told the court that he asked Kandara where the N$29,5 million came from, but Kandara did not tell him it was funds from the SSC.On a question from Theo Frank, SC, representing the SSC and the liquidators, whether he did not find it strange that Kandara would in the first place transfer the millions to Namangol, and then ask for N$3,2 million to be given to him, instead of keeping the N$3,2 million from the start, Josea answered somewhat lamely: “I don’t know.”Namangol stood to earn commission of N$5 million, “plus-minus, I’m talking under correction”, from its role in the deal, Josea said.But, up to now, “I have not got a blue cent,” he added.IN THE DARK? According to /Gâses, she got to know of Namangol’s involvement in the transaction only some time in April, when she learned that N$29,5 million had been transferred from Avid’s bank account to Namangol’s.She had initially been asked by Kandara, who is a cousin of hers, to become a board member of Avid, and he had in effect been running Avid as its Chief Executive Officer, although he had not yet been officially appointed, /Gâses testified.Kandara even paid Avid’s office rent, the court heard./Gâses said she questioned Kandara on why another N$500 000 had not been transferred to Namangol.He told her that the money had also gone to Rosenberg.Only when she checked Avid’s bank account records herself, did she see that by the time the SSC money was transferred to Avid, its account had been in overdraft, so that the N$500 000 in fact went to cover that debit balance./Gâses said she and the board were under the impression that the SSC money would have gone directly from Avid to Rosenberg, and did not know about the Namangol detour beforehand.She claimed that the SSC had been informed that Rosenberg was Avid’s trader.The SSC had however not been informed by Avid that Kandara was involved, it also appears from /Gâses’s evidence.When Josea’s lawyer, Jaco van Rooyen, asked her if the SSC knew Kandara was involved, she replied: “I don’t think so.”The Acting Judge followed that question with one of his own: whether, if the SSC had known that Kandara was involved, it would not have wanted to do business with Avid.Maybe, /Gâses answered, adding that the SSC had dealt with her and had never asked about Kandara./Gâses said she and the board had been in constant contact with Rosenberg, and he had assured them that the investment would in fact be returned long before its date of maturity.Then again, Kandara had been the go-between between them and Rosenberg, she also said.In essence, it appeared that /Gâses and her colleagues on the board might have been kept in the dark – or are possibly now trying to create that impression.”Did you know what was happening, what was going on?” the Acting Judge asked /Gâses at one stage of her evidence.”No,” she answered.The enquiry is set to continue today.* In yesterday’s The Namibian, it was incorrectly stated that /Gâses had been the Managing Director of Avid.She was, in fact, the Chairperson of the company’s board of directors.He acted as the Chief Executive Officer of an upstart investment company, Avid Investment Corporation, without being officially appointed to the post.In the process, he appears to have skimmed N$3,2 million in cash off a N$30 million investment the SSC channelled through Avid, Acting Judge Raymond Heathcote heard in testimony yesterday.The public galleries of the courtroom were packed to capacity for most of the proceedings.Early in the morning already, when Kandara’s name had swiftly become a constant theme in information given to Acting Judge Heathcote, those in court could hear the Acting Judge direct that a subpoena be issued for Kandara to attend the enquiry from today.Avid Investment Corporation, to which the SSC entrusted the N$30 million for a four-month investment period in late January, has been unable to repay the money since late May.The company in effect was a one-man-show, and that one man was Lazarus Kandara, it emerged from the testimony of the first two witnesses to testify before Acting Judge Heathcote in a Companies Act enquiry over the N$30-million investment.Kandara’s name also cropped up during the sessions of the Presidential Commission of Enquiry into the affairs of the SSC in late 2002 and early 2003.That Commission was told that he had managed to persuade the SSC to spend millions of Namibia dollars on life assurance policies that had not been properly authorised by the SSC. In the process, Kandara, who worked in tandem with an experienced insurance broker because he himself was not a registered broker, earned commissions in excess of N$5 million together with his partner.EMPTY OFFICE The first person to answer questions from Acting Judge Heathcote, was Ian McLaren, one of the liquidators appointed to manage the affairs of the provisionally-liquidated Avid.He told the court that he had asked someone from the Deputy Sheriff’s offices to visit Avid’s offices last Friday (July 15) to seize all relevant material.”He found not one single piece of paper in the entire office,” McLaren reported.The evidence of the second witness, Inez /Gâses, might have provided one possible explanation for this./Gâses, who had been the Chairperson of the Avid board of directors, told the court that she had resigned as a director with effect from June 1, but that her resignation had still not been registered.Avid simply never kept proper financial books, and had never had any financial audit done, /Gâses stated.It also did not keep records of the minutes of board meetings, she said, explaining: “The administrative side of the company was never done.”Yet this was a company which managed to persuade the SSC to give it N$30 million to invest on the SSC’s behalf.According to documents already before the court, that investment was supposed to be for four months only, and was supposed to be kept safely in a highly-rated bank in South Africa.N$30 million was transferred from the SSC’s bank account into that of Avid on January 26 for that purpose.But according to the first witness in the enquiry, Nico Josea, who identified himself as the Chief Executive Officer of a Namibian asset management company, Namangol Investments, Lazarus Kandara had transferred only N$29,5 million from Avid to Namangol’s bank account on January 28.Kandara was acting on behalf of Avid, and his request was that Josea had to transfer N$20 million of that money to a financial trader, Alan Rosenberg, that Josea had previously dealt with, Josea said.Josea had to invest a further N$6,3 million in London; this was done for a year, and that investment is set to mature on February 26 next year, he said.Kandara asked for the remaining N$3,2 million to be returned to him in cash, Josea related.The money was returned to Kandara, according to Josea.He told the court that he asked Kandara where the N$29,5 million came from, but Kandara did not tell him it was funds from the SSC.On a question from Theo Frank, SC, representing the SSC and the liquidators, whether he did not find it strange that Kandara would in the first place transfer the millions to Namangol, and then ask for N$3,2 million to be given to him, instead of keeping the N$3,2 million from the start, Josea answered somewhat lamely: “I don’t know.”Namangol stood to earn commission of N$5 million, “plus-minus, I’m talking under correction”, from its role in the deal, Josea said.But, up to now, “I have not got a blue cent,” he added.IN THE DARK? According to /Gâses, she got to know of Namangol’s involvement in the transaction only some time in April, when she learned that N$29,5 million had been transferred from Avid’s bank account to Namangol’s.She had initially been asked by Kandara, who is a cousin of hers, to become a board member of Avid, and he had in effect been running Avid as its Chief Executive Officer, although he had not yet been officially appointed, /Gâses testified.Kandara even paid Avid’s office rent, the court heard./Gâses said she questioned Kandara on why another N$500 000 had not been transferred to Namangol.He told her that the money had also gone to Rosenberg.Only when she checked Avid’s bank account records herself, did she see that by the time the SSC money was transferred to Avid, its account had been in overdraft, so that the N$500 000 in fact went to cover that debit balance./Gâses said she and the board were under the impression that the SSC money would have gone directly from Avid to Rosenberg, and did not know about the Namangol detour beforehand.She claimed that the SSC had been informed that Rosenberg was Avid’s trader.The SSC had however not been informed by Avid that Kandara was involved, it also appears from /Gâses’s evidence.When Josea’s lawyer, Jaco van Rooyen, asked her if the SSC knew Kandara was involved, she replied: “I don’t think so.”The Acting Judge followed that question with one of his own: whether, if the SSC had known that Kandara was involved, it would not have wanted to do business with Avid.Maybe, /Gâses answered, adding that the SSC had dealt with her and had never asked about Kandara./Gâses said she and the board had been in constant contact with Rosenberg, and he had assured them that the investment would in fact be returned long before its date of maturity.Then again, Kandara had been the go-between between them and Rosenberg, she also said.In essence, it appeared that /Gâses and her colleagues on the board might have been kept in the dark – or are possibly now trying to create that impression.”Did you know what was happening, what was going on?” the Acting Judge asked /Gâses at one stage of her evidence.”No,” she answered.The enquiry is set to continue today.* In yesterday’s The Namibian, it was incorrectly stated that /Gâses had been the Managing Director of Avid.She was, in fact, the Chairperson of the company’s board of directors.