Ex-SME Bank directors paid penalties to get off the hook

Frans Kapofi

Minister of defence and veterans affairs Frans Kapofi and the secretary to the Cabinet, George Simataa, are among former SME Bank directors who paid back money as penalty after liquidators accused them of being reckless and giving Zimbabwean national Enock Kamushinda free rein to steal N$200 million from the bank.

Liquidators wanted the directors to be slapped with a N$1-billion bill for allowing the widespread looting of the bank, but it seems all the directors negotiated settlement agreements.

Kapofi, who served on [the] SME Bank’s board in his role as secretary to the Cabinet, yesterday confirmed that he paid back N$1 million to the liquidators in the case.

This includes N$331 00 he was paid in board fees between March 2013 and April 2015.

Simataa is believed to have paid back N$1 million, which includes N$203 500 in board fees.

Simataa was one of the senior government figures who fought the Bank of Namibia against [the] SME Bank’s closure.
At the time, he was the chairperson.

Documents show the bank paid him N$203 000 in sitting allowances.

In addition, Simataa got approval for a N$5-million loan, although he said years ago that he is yet to receive the money.

“As far as I am concerned, the SME Bank case against me was withdrawn by the liquidators. You can confirm that with the e-justice system,” Simataa said yesterday when asked whether he paid a N$1-million settlement.

Social Security Commission chief Milka Mungunda, the biggest beneficiary of SME Bank’s board sitting fees, said she did not repay any money.

George Simataa

She was paid N$478 330 in sitting fees.

Others who repaid fees include former health permanent secretary Andrew Ndishishi, who paid N$198 000.

Namibia’s commercial counsellor to the United States, Petrina Nakale, was paid N$463 000 in board fees.

“I can’t remember the exact figures, but I paid them back the sitting fees,” said Nakale, who added that she opted to settle because she didn’t want the case to drag on for long.

Businessman Justice Hausiku, who currently serves on the Namib Desert Diamonds board, was paid N$111 000 in board fees.

However, he was part of the three directors – Hausiku, Dagma Honsbein and Theo Mberirua – who were not pursued.

Mberirua’s demands for accurate and timely information and his constant questioning of what he considered untoward behaviour led to him being removed from the board.

Hausiku and Honsbein were also relieved of their duties on 29 October 2012, shortly before the bank opened its doors.

The liquidator, after combing through board meeting minutes and other material, found that Mberirua was allegedly removed from the board because he proved to be “difficult” to Zimbabwean directors and shareholders.

The out-of-court settlements means that the former directors will not be pursued further by the liquidators, who are responsible for tracing the money lost by the bank through civil proceedings.

This does not mean the directors are off the hook regarding criminal proceedings.

But the entities responsible for investigating that – the Bank of Namibia, the Namibian Police and the Anti-Corruption Commission – appear to have made little to no progress at bringing those responsible for the bank’s collapse to book.

Petrina Nakale


Kapofi said he consulted with his lawyers last year about the case, who advised him that the court case involving the liquidators could drag on for years.

“They said this is going to be expensive, endless and the chances that this thing goes to court in a year or two are slim,” he said.
“I paid N$1 million,” he said.

“I would have not [sic] settled the case if it was not for the possibility of a prolonged court case process. I decided to let bygones be bygones,” he said.

Kapofi and other directors are accused of enabling the theft of N$200 million.

“I had nothing to do with the money that was lost. I could not have foreseen that they were going to steal,” he said.

Documents show that [the] SME Bank bankrolled Kapofi and other directors through board fees.

For instance, he received N$45 000 in sitting fees for October and November 2015.

Kapofi, who served as the bank’s chair from 2012 to 2015, while appointed to the presidential affairs portfolio, also received a N$700 000 SME Bank loan in June 2014 to buy equipment for his farm.

Andrew Ndishishi


Former trade permanent secretary Ndishishi yesterday told The Namibian he has repaid board fees.

Documents show he was paid N$198 000 in sitting fees.

Although he paid the money, Ndishishi was not happy to be dragged into the SME Bank saga when he was not in charge of the failed bank.

He told The Namibian yesterday that his main role at the bank was to ensure that it complied with regulations and banking licence requirements.

He said some of the money was paid to him as a “gratuity” for finalising the creation of the bank.

Ndishishi said the bank did not open its doors when he left.

“Later I was told that the money from SME Bank is an allowance that should be paid. I just said, ‘Okay, take your money’,” he said.
“I have nothing to do with the stolen money,” he said.

Ndishishi, it is believed, was removed from the SME Bank board at the behest of Kamushinda, who is described by the courts as one of the key suspects in the theft.

Not everyone liked Ndishishi at [the] SME Bank.

He was removed from the board on 29 October 2012, and replaced by Kapofi, who was seen as more amenable to work with by Kamushinda.

Ndishishi was allegedly removed because he rejected Kamushinda’s proposal to appoint Zimbabweans as the majority of senior executives at the bank.

Ndishishi at the time said Namibia has a more advanced and modern banking sector, and therefore Namibian executives should be appointed.


Three years ago, liquidators said six former SME Bank board directors were reckless and allowed Zimbabwean national Enock Kamushinda free rein to steal N$200 million from the bank.

“They [the directors] failed generally to act honestly and in good faith, or in the best interest, or for the benefit of [the] SME Bank and its depositors,” the liquidators said.

One of the main demands by the liquidators is that the High Court declares “that the defendants are jointly and severally liable to the plaintiffs, without any limitations, for all/any of the debts or other liabilities of [the] SME Bank”.

They also asked the court to hold ex-directors “personally liable or responsible without limitation, for the liabilities of [the] SME Bank”.

Former SME Bank legal adviser Tania Pearson explained the bank liabilities in court papers filed on 12 September 2019 as part of this case.

“The contracted liabilities of [the] SME Bank, as at 11 July 2020 amounted to N$1 billion in terms of depositors’ liabilities, and N$60 million in respect of the promissory note issued to JM Busha,” Pearson said.

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