Contempt of court row: Entrépo microlender slams finance minister Shafudah over payroll deductions

The microloans company Entrépo Finance is accusing minister of finance Ericah Shafudah of being in contempt of court by not complying with a High Court order about the Ministry of Finance’s payroll deductions management system.

While alleging that Shafudah has failed to comply with an order issued in the Windhoek High Court on 28 November, Entrépo Finance on Friday requested judge Lotta Ambunda to order the minister to file a sworn statement in which she should provide a detailed plan stipulating how she will implement a fully functional payroll deductions management system (PDMS) for the finance ministry.

Ambunda’s ruling on Entrépo’s application for a court order directing Shafudah to file an affidavit is scheduled to be delivered today.

Entrépo is also asking the court to allow it to request, based on the same documents filed at the court on Thursday, that Shafudah be found guilty of contempt of court and sentenced to a fine or a period of imprisonment, which would be suspended immediately when she complies with the interim court order issued on 28 November.

Shafudah is denying that she has not complied with the order.

In the order, the court directed the finance minister not to interfere in the loading of new deductions on the government’s PDMS and not to issue instructions that no new deductions may be loaded onto the system.

The court also authorised the continued operation of the PDMS pending the outcome of an application in which Entrépo is asking the court to review and set aside Shafudah’s decision to discontinue the system from the end of November and to stop the loading of new deductions on the system.

The deduction codes that the finance ministry wants to discontinue allow microlenders like Entrépo to have repayments of loans granted by them deducted directly from the salaries of government employees and paid to the lenders.

In an affidavit filed at the court on Thursday, Entrépo managing director Liffie Champion says the company was established and exists exclusively to provide microloans to government employees, and that its business depends on the PDMS.

However, Entrépo has not been able to get access to the system since the start of December, after the ministry took over the management of the system from the company Avril Payroll Deduction Management, which administered the system since 2003, Champion says.

She also says the finance minister “intends moving from a computerised real-time system to a manual system operated by humans and which does not remotely resemble the PDMS, which is what the court ordered should remain in place, and which the minister stated under oath that it was ready to conduct in-house”.

With no functional PDMS in place now, Shafudah is deliberately not complying with the court order of 28 November, Champion claims.

Entrépo is fearing that 70 327 deductions, for the payment of a total amount of about N$70 million to the company, that are due to be made on the system in December will not be done, Champion says as well.

According to Shafudah, there is no basis on which she should be held in contempt of court.

“I have no intention to and did not interfere in the loading of new deductions onto the PDMS. I have also not issued any instructions to anyone that no new deductions may be loaded onto the PDMS,” Shafudah says in an affidavit also filed at the court on Thursday.

Entrépo’s inability to get access to the system stems from the fact that the finance ministry’s agreement with Avril expired at the end of November, Shafudah says.

There is no court order directing her to renew the ministry’s agreement with Avril, Shafudah says as well.

She further says the only conceivable lawful way in which the court’s interim order can be given effect to is for the finance ministry’s executive director to set up structures that would allow for new deductions to be loaded onto a payment system.

This is being done, and amounts payable to deduction code holders for deductions from government-employed teachers and police officers should be paid to them by Wednesday this week, while the net salaries of teachers and police officers should be paid by Friday, according to Shafudah.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.