Avid-SSC deal ‘never existed’

A KEY figure in the web of transactions that followed on the Social Security Commission’s luckless investment of N$30 million early this year has confirmed that the international investment deal from which the SSC’s money was supposed to be repaid does not exist.

An affidavit from Johannesburg-based financial trader Alan Rosenberg that has been filed with the High Court consists of three short paragraphs – but its impact may prove much bigger than its size would suggest. In the affidavit, dated Wednesday this week, Rosenberg said he confirms what Eric Knouwds, the provisional liquidator in charge of two of the companies that received the SSC’s N$30 million investment, stated in another affidavit as far as it related to Rosenberg and financial transactions he had been involved in.That statement from Rosenberg has far-reaching implications.THE N$15M COURT SCAM In his affidavit, Knouwds said Rosenberg and Nico Josea, who has been charged with fraud and theft in connection with his role in the SSC deal, had concocted a bogus court case in South Africa to enable Rosenberg to pay N$15 million of the SSC’s money back to Josea.Knouwds also stated that an “investment trade” that Josea claimed would earn his asset-management company, Namangol Investments, US$17,9 million (about N$117 million) by March next year, was in fact a still-born initiative that never got off the ground.Josea has cited this expected income as one of the grounds why he was disputing claims that Namangol Investments would have to be liquidated because it is not able to pay its debts to Avid Investment Corporation, the company with which the SSC had invested the N$30 million in late January.Through his affidavit, Rosenberg has now in effect backed Knouwds’s claim that Rosenberg and Josea had set up sham litigation in South Africa so that Josea could get hold of N$15 million of the SSC’s investment money.He has in effect also backed Knouwds’s claim that Rosenberg either misled Josea into believing that Namangol Investments stood to earn US$17,9 million from an investment set up by Rosenberg or that Josea had conspired with Rosenberg to mislead the High Court and Namangol’s provisional liquidator with regard to that supposed deal.Rosenberg’s and Knouwds’s affidavits were filed with the High Court yesterday in preparation for a return of two cases, in which Knouwds is asking the court to order that Namangol Investments be wound up and that Josea’s personal estate be sequestrated.Because the two new affidavits and further documents were provided to Josea’s lawyers only early yesterday morning, Judge President Petrus Damaseb postponed the hearing of both cases to November 28 and 29.The starting point of the cases was on January 28, when Avid’s Chief Executive Officer, the late Lazarus Kandara, gave an instruction for N$29,5 million of the N$30 million that the SSC had invested with Avid two days before to be transferred to a bank account of Namangol Investments.Also on January 28, Josea had N$20 million of that money transferred from that account to an account controlled by Rosenberg in Johannesburg.On March 14, Josea’s lawyers in Johannesburg paid N$14,899 million into one of Josea’s personal bank accounts in Namibia.That money came from N$15 million that Rosenberg had paid to the lawyers earlier in March, in terms of a court order which settled a case that Namangol Investments had started against Rosenberg.In an affidavit that he made to oppose the applications for his personal sequestration and the liquidation of Namangol, Josea denied that the N$15 million that Rosenberg paid to him was money that was due to be returned to Avid and thus also to the SSC.Instead, he claimed that this money was damages that were due to Namangol because, according to him, Rosenberg had breached the agreement that they had for the investment of the N$20 million that was initially transferred to Rosenberg.The case between Namangol and Rosenberg was settled on the basis that Rosenberg was to repay that N$15 million to Namangol, plus further payments amounting to N$15 million – which to date have not been made – and that Namangol would also get US$17,9 million of an investment trade that Rosenberg was engaged in when that pays out in the first week of March next year, Josea has stated.Rosenberg has now confirmed that such an investment trade was actually stillborn, Knouwds points out in one of the affidavits that were handed to Josea’s lawyers yesterday.Knouwds also stated that it was clear from Rosenberg’s conduct after the settlement of the case between him and Namangol Investments that he did not intend to pay the outstanding amount that he supposedly owed to Namangol.Through his affidavit, Rosenberg has effectively also confirmed this claim.Knouwds added that at this stage it is calculated that the total amount that would be recovered from Josea and Namangol out of the N$29,5 million of the SSC’s money that they have received, is between N$13 and N$18,5 million.”I persist with the allegation that [Namangol Investments] and Mr Josea have defrauded Avid and this forms the basis of the charges in terms of which Mr Josea is currently incarcerated,” Knouwds also states elsewhere in his affidavit.Josea has been in custody since July 26.His lawyer, André Louw, said yesterday that he would bring a bail application in the Windhoek Magistrate’s Court today.In the affidavit, dated Wednesday this week, Rosenberg said he confirms what Eric Knouwds, the provisional liquidator in charge of two of the companies that received the SSC’s N$30 million investment, stated in another affidavit as far as it related to Rosenberg and financial transactions he had been involved in.That statement from Rosenberg has far-reaching implications. THE N$15M COURT SCAM In his affidavit, Knouwds said Rosenberg and Nico Josea, who has been charged with fraud and theft in connection with his role in the SSC deal, had concocted a bogus court case in South Africa to enable Rosenberg to pay N$15 million of the SSC’s money back to Josea. Knouwds also stated that an “investment trade” that Josea claimed would earn his asset-management company, Namangol Investments, US$17,9 million (about N$117 million) by March next year, was in fact a still-born initiative that never got off the ground.Josea has cited this expected income as one of the grounds why he was disputing claims that Namangol Investments would have to be liquidated because it is not able to pay its debts to Avid Investment Corporation, the company with which the SSC had invested the N$30 million in late January.Through his affidavit, Rosenberg has now in effect backed Knouwds’s claim that Rosenberg and Josea had set up sham litigation in South Africa so that Josea could get hold of N$15 million of the SSC’s investment money.He has in effect also backed Knouwds’s claim that Rosenberg either misled Josea into believing that Namangol Investments stood to earn US$17,9 million from an investment set up by Rosenberg or that Josea had conspired with Rosenberg to mislead the High Court and Namangol’s provisional liquidator with regard to that supposed deal.Rosenberg’s and Knouwds’s affidavits were filed with the High Court yesterday in preparation for a return of two cases, in which Knouwds is asking the court to order that Namangol Investments be wound up and that Josea’s personal estate be sequestrated.Because the two new affidavits and further documents were provided to Josea’s lawyers only early yesterday morning, Judge President Petrus Damaseb postponed the hearing of both cases to November 28 and 29.The starting point of the cases was on January 28, when Avid’s Chief Executive Officer, the late Lazarus Kandara, gave an instruction for N$29,5 million of the N$30 million that the SSC had invested with Avid two days before to be transferred to a bank account of Namangol Investments.Also on January 28, Josea had N$20 million of that money transferred from that account to an account controlled by Rosenberg in Johannesburg.On March 14, Josea’s lawyers in Johannesburg paid N$14,899 million into one of Josea’s personal bank accounts in Na
mibia.That money came from N$15 million that Rosenberg had paid to the lawyers earlier in March, in terms of a court order which settled a case that Namangol Investments had started against Rosenberg.In an affidavit that he made to oppose the applications for his personal sequestration and the liquidation of Namangol, Josea denied that the N$15 million that Rosenberg paid to him was money that was due to be returned to Avid and thus also to the SSC.Instead, he claimed that this money was damages that were due to Namangol because, according to him, Rosenberg had breached the agreement that they had for the investment of the N$20 million that was initially transferred to Rosenberg.The case between Namangol and Rosenberg was settled on the basis that Rosenberg was to repay that N$15 million to Namangol, plus further payments amounting to N$15 million – which to date have not been made – and that Namangol would also get US$17,9 million of an investment trade that Rosenberg was engaged in when that pays out in the first week of March next year, Josea has stated.Rosenberg has now confirmed that such an investment trade was actually stillborn, Knouwds points out in one of the affidavits that were handed to Josea’s lawyers yesterday.Knouwds also stated that it was clear from Rosenberg’s conduct after the settlement of the case between him and Namangol Investments that he did not intend to pay the outstanding amount that he supposedly owed to Namangol.Through his affidavit, Rosenberg has effectively also confirmed this claim.Knouwds added that at this stage it is calculated that the total amount that would be recovered from Josea and Namangol out of the N$29,5 million of the SSC’s money that they have received, is between N$13 and N$18,5 million.”I persist with the allegation that [Namangol Investments] and Mr Josea have defrauded Avid and this forms the basis of the charges in terms of which Mr Josea is currently incarcerated,” Knouwds also states elsewhere in his affidavit.Josea has been in custody since July 26.His lawyer, André Louw, said yesterday that he would bring a bail application in the Windhoek Magistrate’s Court today.