Bad investments cost GIPF N$650m

THE Ministry of Finance has suspended its Accountant General, Maru Tjihumino, with effect from last Tuesday after losses of more than N$650 million were reported at the Government Institutions Pensions Fund (GIPF), Permanent Secretary of Finance Calle Schlettwein said at the end of last week.

Tjihumino is also the Chairman of the GIPF Board of Trustees that handles the N$20 billion civil servants’ pensions fund, the single largest fund of any kind in Namibia. Although the GIPF falls under the Office of the Prime Minister, the Finance Ministry also exerts some control over it via Namfisa, charged with overseeing all investments made with State and insurance funds.Schlettwein’s announcement came in the wake of the GIPF disclosing in its latest annual report that it had to write off loans in excess of N$630 million from its Development Capital Portfolio (DCP) last year.Total investments in unlisted companies by the DCP amounted to about N$750 million, before the taps were closed.Other sources suggested the losses could be as high as N$709 million, which would make it the single biggest financial scandal yet to emerge, dwarfing even the Offshore Development Corporation’s missing N$100 million investment.Tjihumino has been effectively forced to recuse himself from all GIPF Board meetings since accusations surfaced two weeks ago of an attempt by his business partner, Vitura Kavari, to elbow their way into the Swakopmund Waterfront Development project.The GIPF has subsequently appointed legal firm Sisa Namandje Legal Practitioners to investigate these accusations.GIPF CEO Primus Hango said he expected the firm’s report “very soon”.But a further independent forensic audit, as had been commissioned in the case of widespread tax fraud in Oshikango, cannot be excluded at this stage.Most of the loans written off in total or in part were made to Black Economic Empowerment firms which invariably had at least two things in common: powerful political connections, and easy access to GIPF and other State money.Nearly all of these companies appeared to have gained access to GIPF funding via Namibia Asset Management (Pty) Ltd, which from 2000 on held a “joint management contract” to place GIPF funds with other investment firms.Namibia Asset Management is controlled via the Ae//Gams Trust by Aaron Mushimba, brother-in-law to Swapo President Sam Nujoma and close confidant of former Prime Minister Hage Geingob.The GIPF, as a function of general administration of the Government, falls under the ambit of the Office of the Prime Minister, which position was held by Hage Geingob until his sudden demotion in 2002 by President Nujoma.Most of the companies were founded in 2000 and 2001, and in many cases, shared directors that read like a Who’s Who of Swapo’s elite inner circle.Several were also linked directly to Mushimba through his right-hand man, Coen Wium, or direct relatives.Others include lawyers Nate Ndauendapo, Shafimana Ueitele, Sackey Aipinge and Jacob Haimbodi, Anna Hange, Ellis Ratjama, Nujoma’s son-in-law David Imbili and the Marenga family.In the case of five investment companies – Tsogang Investment Company (Pty) Ltd, Omina Investment (Pty) Ltd, Namibia Chicken Investment (Pty) Ltd (previous Nando’s franchisee), Multiline Investments (Pty) Ltd and Walvis Bay Investments (Pty) Ltd – nearly N$50 million has been written off.It is not known what collateral, if any, these companies had provided.At least two of these investment companies can be traced back directly to Mushimba’s Ae//Gams Trust, while others have borrowed large amounts from other state sources.Omaheke Tannery and Leather Processing (Pty) Ltd., for example, also appears to be linked to the failed Uri //Khubis abattoir outside Witvlei, which has also borrowed millions from the likes of Agribank.Another company, Sepiolite Production (Pty) Ltd, which is controlled by Aipinge, Anna Hange and David Imbili, has also borrowed extensively from the Mines and Energy Ministry’s Mineral Development Fund to finance their mining operations on a farm east of Gobabis.Operations there appeared to have ceased, senior MME staff told The Namibian.Schlettwein admitted that there was serious concern over public resources that were being lost because of unscrupulous and politically well-connected businessmen.”We try and prevent it as far as possible, and follow up on every case, but not all the issues fall under the control of the Ministry (of Finance),” he said.Neither Mushimba nor Wium could be reached at their offices at Swaco House, in central Independence Avenue, over the long weekend for comment.* John Grobler is a freelance journalist; 081 240 1587 COMPANY: GIPF LOAN CURRENT VALUE LOSS Namibia Grape: 187 169 895 90 000 000 97 169 895 Namibia Pig Farm: 26 350 000 18 000 000 8 350 000 Tsogang Investment: 5 000 000 0 5 000 000 Sepiolite Production: 10 000 000 0 10 000 000 Omina Investments: 12 000 000 0 12 000 000 Omaheke Tannery: 20 000 000 0 20 000 000 Namibia Plastics and Liquid Foods: 20 000 000 4 000 000 16 000 000 OPN / KAN: 157 921 542 32 369 000 125 552 542 Namibia Chicken: 8 455 045 0 8 455 045 Preferred Management Services: 1 792 000 1 607 000 185 000 Multiline Investments: 20 000 000 0 20 000 000 Ongopolo 40 000 000 58 547 000 Windhoek Country Club: 30 000 000 99 250 000 NAFCO* 26 800 000 3 485 000 (22 955 000) Von Braun St.* 5 600 000 1 841 000 (3 759 000) Whk Office Park:* 45 000 000 27 311 000 (17 689 000) Walvis Bay Investment: 5 000 000 656 000 4 344 000 Tsogang Investment: 5 000 000 0 5 000 000 Omina Investments: 12 000 000 0 12 000 000 Namibia Chicken: 8 455 045 0 8 455 045 Multiline Investments: 20 000 000 0 20 000 000 Walvis Bay Investment: 5 000 000 656 000 4 344 000 Omaheke Tannery: 20 000 000 0 20 000 000 * Loan amounts reduced due to repayments on loanAlthough the GIPF falls under the Office of the Prime Minister, the Finance Ministry also exerts some control over it via Namfisa, charged with overseeing all investments made with State and insurance funds.Schlettwein’s announcement came in the wake of the GIPF disclosing in its latest annual report that it had to write off loans in excess of N$630 million from its Development Capital Portfolio (DCP) last year.Total investments in unlisted companies by the DCP amounted to about N$750 million, before the taps were closed.Other sources suggested the losses could be as high as N$709 million, which would make it the single biggest financial scandal yet to emerge, dwarfing even the Offshore Development Corporation’s missing N$100 million investment.Tjihumino has been effectively forced to recuse himself from all GIPF Board meetings since accusations surfaced two weeks ago of an attempt by his business partner, Vitura Kavari, to elbow their way into the Swakopmund Waterfront Development project.The GIPF has subsequently appointed legal firm Sisa Namandje Legal Practitioners to investigate these accusations.GIPF CEO Primus Hango said he expected the firm’s report “very soon”.But a further independent forensic audit, as had been commissioned in the case of widespread tax fraud in Oshikango, cannot be excluded at this stage. Most of the loans written off in total or in part were made to Black Economic Empowerment firms which invariably had at least two things in common: powerful political connections, and easy access to GIPF and other State money.Nearly all of these companies appeared to have gained access to GIPF funding via Namibia Asset Management (Pty) Ltd, which from 2000 on held a “joint management contract” to place GIPF funds with other investment firms.Namibia Asset Management is controlled via the Ae//Gams Trust by Aaron Mushimba, brother-in-law to Swapo President Sam Nujoma and close confidant of former Prime Minister Hage Geingob.The GIPF, as a function of general administration of the Government, falls under the ambit of the Office of the Prime Minister, which position was held by Hage Geingob until his sudden demotion in 2002 by President Nujoma.Most of the companies were founded in 2000 and 2001, and in many cases, shared directors that read like a Who’s Who of Swapo’s elite inner circle.Several were also linked directly to Mushimba through his right-hand man, Coen Wium, or direct relatives.Others include lawyers Nate Ndauendapo, Shafimana Ueitele, Sackey Aipinge and Jacob Haimbodi, Anna Hange, Ellis Ratjama, Nujoma’s son-in-law David Imbili and the Marenga family.In the case of five investment companies – Tsogang Investment Company (Pty) Ltd, Omina Investment (Pty) Ltd, Namibia Chicken Investment (Pty) Ltd (previous Nando’s franchisee), Multiline Investments (Pty) Ltd and Walvis Bay Investments (Pty) Ltd – nearly N$50 million has been written off.It is not known what collateral, if any, these companies had provided.At least two of these investment companies can be traced back directly to Mushimba’s Ae//Gams Trust, while others have borrowed large amounts from other state sources.Omaheke Tannery and Leather Processing (Pty) Ltd., for example, also appears to be linked to the failed Uri //Khubis abattoir outside Witvlei, which has also borrowed millions from the likes of Agribank.Another company, Sepiolite Production (Pty) Ltd, which is controlled by Aipinge, Anna Hange and David Imbili, has also borrowed extensively from the Mines and Energy Ministry’s Mineral Development Fund to finance their mining operations on a farm east of Gobabis.Operations there appeared to have ceased, senior MME staff told The Namibian.Schlettwein admitted that there was serious concern over public resources that were being lost because of unscrupulous and politically well-connected businessmen.”We try and prevent it as far as possible, and follow up on every case, but not all the issues fall under the control of the Ministry (of Finance),” he said.Neither Mushimba nor Wium could be reached at their offices at Swaco House, in central Independence Avenue, over the long weekend for comment.* John Grobler is a freelance journalist; 081 240 1587 COMPANY: GIPF LOAN CURRENT VALUE LOSS Namibia Grape: 187 169 895 90 000 000 97 169 895 Namibia Pig Farm: 26 350 000 18 000 000 8 350 000 Tsogang Investment: 5 000 000 0 5 000 000 Sepiolite Production: 10 000 000 0 10 000 000 Omina Investments: 12 000 000 0 12 000 000 Omaheke Tannery: 20 000 000 0 20 000 000 Namibia Plastics and Liquid Foods: 20 000 000 4 000 000 16 000 000 OPN / KAN: 157 921 542 32 369 000 125 552 542 Namibia Chicken: 8 455 045 0 8 455 045 Preferred Management Services: 1 792 000 1 607 000 185 000 Multiline Investments: 20 000 000 0 20 000 000 Ongopolo 40 000 000 58 547 000 Windhoek Country Club: 30 000 000 99 250 000 NAFCO* 26 800 000 3 485 000 (22 955 000) Von Braun St.* 5 600 000 1 841 000 (3 759 000) Whk Office Park:* 45 000 000 27 311 000 (17 689 000) Walvis Bay Investment: 5 000 000 656 000 4 344 000 Tsogang Investment: 5 000 000 0 5 000 000 Omina Investments: 12 000 000 0 12 000 000 Namibia Chicken: 8 455 045 0 8 455 045 Multiline Investments: 20 000 000 0 20 000 000 Walvis Bay Investment: 5 000 000 656 000 4 344 000 Omaheke Tannery: 20 000 000 0 20 000 000 * Loan amounts reduced due to repayments on loan