GIPF forensic inspection takes a step forward

THE first interim report on a forensic inspection of the Government Institutions Pensions Fund (GIPF) was delivered to Namfisa yesterday, well-placed officials said.

The Acting CEO of Namfisa (the Namibian Financial Institutions Supervisory Authority), Lily Brandt, was not in office yesterday and other Namfisa officials declined to comment. GIPF CEO Primus Hango is attending the Cabinet retreat at the coast and could also not be reached for comment.The forensic inspection – as opposed to the annual audit, normally performed by Deloitte & Touche – is being done by the South African audit firm Nkonki Sizwe Ntsaluba, contracted by Saunderson, Theron and Associates.At the same time, questions persist over the true state of the GIPF’s loan book.Apart from loans made via Sanlam Investment Management’s Development Capital Portfolio (estimated disbursements: N$900 million), loans have also been made from two other GIPF-administered portfolios, an inspection of past records showed.For example, loans for three companies are not listed in GIPF’s last two annual financial statements.In a written reply to journalist Christo Retief in August, GIPF CEO Primus Hango confirmed that Tsogang Investments (N$5 million), Sepiolite Investments (N$10 million) and Multiline Investments (N$20 million) had obtained loans from the pension fund.Disbursements of N$636 088 482 had been made to some 18 black economic empowerment (BEE) companies, including the three mentioned above, which total audited fair value at March 2004 was N$352 066 000, a schedule attached to Hango’s reply to Retief showed.”The above values are as determined by the Board of Trustees in accordance to GAAP (Generally Accepted Accounting Practises) requirements as of 31 March 2004.The value of projects with zero values are those with liabilities that exceed the value of assets,” which values changed from time to time as loans are repaid, Hango wrote to Republikein’s Retief.This year’s financials (2004-2005) reflect under its Notes to the Financials lists investments, in the form of loans, of N$281,043 million (at fair value) on the GIPF books.This amounted to N$353,807 million for 2004-2005, showing a drop in value of N$72,764 million.No provision for bad debt is listed anywhere in the current financials.In addition, no explanation for the differing amounts listed as loans on GIPF’s books could be found.Sepiolite’s Sackey Aipinge confirmed to The Namibian in a previous interview that he had approached GIPF “directly” to finance the N$10 million in shares he obtained on behalf of Nam-Mic (Pty) the sepiolite mining venture south-east of Gobabis.Other unlisted ventures with retirement fund of the 71 448 civil servants and parastatal employees include Black Square Engineering (N$9 732 077,32), which was finally sequestrated by the GIPF late last year.A comparison with bankruptcy records held by the Master of the High Court revealed that another dead horse on the GIPF balance sheet, Omina Investments (N$12 million), appears to have lost its pile on its 40 per cent share in Aaron Mushimba’s bankrupt Grosse Bucht Diamonds (Pty) Ltd and Diaz Point Exploration (Pty) Ltd.Coen Wium, Mushimba’s right-hand man, who also serves on Omina’s Board of Directors, applied for Grosse Bucht and Diaz Point’s sequestration earlier this year to avert Wesbank foreclosing on their equipment, according to historic court records.Aipinge of Sepiolite was also a director of this company.Another Mushimba-owned non-performing loan still listed among the GIPF’s investments in shares is Omaheke Tannery and Leather Processing (N$20 million), which formed part of the failed Uri//Khubis venture.The Witvlei-based abattoir, which went bankrupt with only about N$21,9 million in sellable assets, borrowed nearly N$100 million from various State-run soft loan schemes.The same records also showed that the GIPF’s Hango had applied for the sequestration of Namibia Chicken Investment shareholders Gangan Enterprises CC (N$1 438 628) and Onguti Enterprises t/a Nando’s Town Centre and Nando’s Klein Windhoek (N$1 178 530,76 + N$195 586).These two loans (Total: N$2 812 744,76) still does not explain the balance (N$5,637,302) of the N$8 455 045 that GIPF paid out to Namibia Chicken Investments, still listed on the current balance sheets but at zero value.GIPF lodged a claim of more than N$13 million against NCI, but with only shares in NCI as security, it is unlikely to recover any of the money from NCI, Gangan CC or Onguti CC.NCI had only repaid N$300 000 on their loan.”It sometimes seems that they (GIPF Board of Trustees) does not know what exactly they have loaned out – and if they do, they are not saying,” a senior official close to the audit said.Annual auditors Deloitte & Touche noted in the schedules to the financials that “…fidelity cover as required by the rules of the fund was not maintained during the year,” implying that the Trustee of the GIPF Board might, under specific circumstances, be held liable for the losses incurred during this period.The GIPF Board of Trustees consists of chairman Z.(Manu) Tjihumino, O.Akwenye, L Namuhuja-Namholoh and C Phillipus for the Public Service Commission.Risto Kapenda, P Nevonga and N Nghipandulwa represent the unions, while GD Elliot and H Ruppel have been appointed by the government, according to the preface to the financials.Tjihumino is suspended from both the GIPF Board and his position as Accountant General: Directorate Budgetary Control.Legal firm Sisa Namandje and Associates has been commissioned to investigate allegations that he tried muscling into the ailing Swakopmund Waterfront Company shareholding, but the outcome remained confidential.He is also expected to face a disciplinary hearing on charges that he allegedly ran two companies from his MoF offices, well-placed ministerial sources said.Ruppel, former Attorney General and previously Transparency International’s local representative, has been appointed acting chairman, pending the outcome of the investigation into Tjihumino’s alleged misconduct.* John Grobler is a freelance journalist; 081 240 1587GIPF CEO Primus Hango is attending the Cabinet retreat at the coast and could also not be reached for comment.The forensic inspection – as opposed to the annual audit, normally performed by Deloitte & Touche – is being done by the South African audit firm Nkonki Sizwe Ntsaluba, contracted by Saunderson, Theron and Associates.At the same time, questions persist over the true state of the GIPF’s loan book.Apart from loans made via Sanlam Investment Management’s Development Capital Portfolio (estimated disbursements: N$900 million), loans have also been made from two other GIPF-administered portfolios, an inspection of past records showed.For example, loans for three companies are not listed in GIPF’s last two annual financial statements.In a written reply to journalist Christo Retief in August, GIPF CEO Primus Hango confirmed that Tsogang Investments (N$5 million), Sepiolite Investments (N$10 million) and Multiline Investments (N$20 million) had obtained loans from the pension fund.Disbursements of N$636 088 482 had been made to some 18 black economic empowerment (BEE) companies, including the three mentioned above, which total audited fair value at March 2004 was N$352 066 000, a schedule attached to Hango’s reply to Retief showed.”The above values are as determined by the Board of Trustees in accordance to GAAP (Generally Accepted Accounting Practises) requirements as of 31 March 2004.The value of projects with zero values are those with liabilities that exceed the value of assets,” which values changed from time to time as loans are repaid, Hango wrote to Republikein’s Retief.This year’s financials (2004-2005) reflect under its Notes to the Financials lists investments, in the form of loans, of N$281,043 million (at fair value) on the GIPF books.This amounted to N$353,807 million for 2004-2005, showing a drop in value of N$72,764 million.No provision for bad debt is listed anywhere in the current financials. In addition, no explanation for the differing amounts listed as loans on GIPF’s books could be found.Sepiolite’s Sackey Aipinge confirmed to The Namibian in a previous interview that he had approached GIPF “directly” to finance the N$10 million in shares he obtained on behalf of Nam-Mic (Pty) the sepiolite mining venture south-east of Gobabis.Other unlisted ventures with retirement fund of the 71 448 civil servants and parastatal employees include Black Square Engineering (N$9 732 077,32), which was finally sequestrated by the GIPF late last year.A comparison with bankruptcy records held by the Master of the High Court revealed that another dead horse on the GIPF balance sheet, Omina Investments (N$12 million), appears to have lost its pile on its 40 per cent share in Aaron Mushimba’s bankrupt Grosse Bucht Diamonds (Pty) Ltd and Diaz Point Exploration (Pty) Ltd.Coen Wium, Mushimba’s right-hand man, who also serves on Omina’s Board of Directors, applied for Grosse Bucht and Diaz Point’s sequestration earlier this year to avert Wesbank foreclosing on their equipment, according to historic court records.Aipinge of Sepiolite was also a director of this company.Another Mushimba-owned non-performing loan still listed among the GIPF’s investments in shares is Omaheke Tannery and Leather Processing (N$20 million), which formed part of the failed Uri//Khubis venture.The Witvlei-based abattoir, which went bankrupt with only about N$21,9 million in sellable assets, borrowed nearly N$100 million from various State-run soft loan schemes.The same records also showed that the GIPF’s Hango had applied for the sequestration of Namibia Chicken Investment shareholders Gangan Enterprises CC (N$1 438 628) and Onguti Enterprises t/a Nando’s Town Centre and Nando’s Klein Windhoek (N$1 178 530,76 + N$195 586). These two loans (Total: N$2 812 744,76) still does not explain the balance (N$5,637,302) of the N$8 455 045 that GIPF paid out to Namibia Chicken Investments, still listed on the current balance sheets but at zero value.GIPF lodged a claim of more than N$13 million against NCI, but with only shares in NCI as security, it is unlikely to recover any of the money from NCI, Gangan CC or Onguti CC.NCI had only repaid N$300 000 on their loan.”It sometimes seems that they (GIPF Board of Trustees) does not know what exactly they have loaned out – and if they do, they are not saying,” a senior official close to the audit said.Annual auditors Deloitte & Touche noted in the schedules to the financials that “…fidelity cover as required by the rules of the fund was not maintained during the year,” implying that the Trustee of the GIPF Board might, under specific circumstances, be held liable for the losses incurred during this period.The GIPF Board of Trustees consists of chairman Z.(Manu) Tjihumino, O.Akwenye, L Namuhuja-Namholoh and C Phillipus for the Public Service Commission.Risto Kapenda, P Nevonga and N Nghipandulwa represent the unions, while GD Elliot and H Ruppel have been appointed by the government, according to the preface to the financials.Tjihumino is suspended from both the GIPF Board and his position as Accountant General: Directorate Budgetary Control.Legal firm Sisa Namandje and Associates has been commissioned to investigate allegations that he tried muscling into the ailing Swakopmund Waterfront Company shareholding, but the outcome remained confidential.He is also expected to face a disciplinary hearing on charges that he allegedly ran two companies from his MoF offices, well-placed ministerial sources said.Ruppel, former Attorney General and previously Transparency International’s local representative, has been appointed acting chairman, pending the outcome of the investigation into Tjihumino’s alleged misconduct. * John Grobler is a freelance journalist; 081 240 1587