Cabinet freezes GIPF scheme

GOVERNMENT has finally come down on the Government Institutions Pension Fund (GIPF), halting in its tracks a N$4 billion loan scheme of the fund to unlisted businesses.

The scheme, known as Unlisted Investment Policy, was hedged to replace the now infamous Development Capital Portfolio (DCP) through which GIPF lost around N$660 million.Among the latest crop picked by GIPF to queue up for the N$4 billion-strong fund were those who had benefited from DCP, whose beneficiaries were described in the 2006 Namibia Financial Institutions Supervisory Authority (Namfisa) as belonging to the ‘old boys’ club’. The Namibian was reliably informed that the decision taken at Cabinet’s bi-monthly meeting on Tuesday came as a result of pressure from trade unions and the ruling Swapo Party structures.The Government’s hardline and surprise move came despite GIPF’s assurances that it won’t make the same mistakes it had with the DCP and that investment managers, and no longer GIPF trustees, would approve these ‘investments’. GIPF chairman Hartmut Ruppel, in a recent interview with The Namibian, described the new scheme as taking the ‘wholesale approach and not the retail approach’ characterised by the DCP. Government sources said Cabinet decided to halt the new Unlisted Investment Policy to first put the DCP fiasco to rest. GIPF also came in for heavy criticism after it emerged that some of the entities or individuals behind companies lined up for the newly hedged scheme were the same people who had benefited from the failed DCP.According to a local English daily, BEE business tycoon Ranga Haikali is either a shareholder or a director in two of the companies earmarked to dip their fingers into the N$4 billion honey pot. These companies are Safland, a commercial property brokerage firm, and Preferred Management Services, to whom N$450 million and N$250 million were committed respectively, according to the report.The report also identified Sanlam Investment Management (N$250 million) who was also a player in the DCP failure, Botswana’s Letshego (N$100 million), Old Mutual Investment Group Namibia (N$350 million) and National Housing Enterprise (N$200 million) as recipients from the N$4 billion fund.Yesterday Government was tight-lipped about the decision, but Cabinet sources said an announcement would be made soon. It was only a matter of Government first sorting out formalities with all role players before making an official announcement, it was indicated.The latest developments came shortly after reports of Government’s reluctance to deal with the DCP and hold to account those responsible for the financial flop. Last week The Namibian reported that even President Hifikepunye Pohamba had rejected workers’ call for a Presidential Commission of Inquiry into the now defunct DCP.The Namibian was reliably informed that Pohamba refused to entertain the National Union of Namibian Workers’ congress resolution that all those responsible for the DCP losses should be brought to book.Other media reports stated that Cabinet was divided in dealing with the issue, with only a handful of senior ministers supporting the move to take action.This will be the first time Government shows signs of taking an interest in the matter despite having been briefed four years ago. Both Prime Minister Nahas Angula and Finance Minister Saara Kuugongelwa-Amadhila were already informed of the outcome of a Namfisa investigation in 2007. Namfisa in 2006 commissioned an independent investigation which found that the DCP was ‘fatally flawed’ and that the GIPF had done virtually nothing to recover workers’ pension money when these projects went bust.