GIPF says pension money is safe

DESPITE their advice telling the public to stay away from Baobab Capital and its investment vehicle, Namfisa remains tight-lipped on irregularities committed by the capital mobiliser.

The Namibian Financial Institutions Supervisory Authority (Namfisa) advertised last week it is in the process of deregistering an unlisted space capital mobiliser, Baobab Capital, and its investing vehicle, Baobab Growth Fund.

Jerome Kisting is Baobab Capital’s managing director with Primus Hango, former GIPF chief executive officer, and Ramon Maasdorp as the companies independent non-executive directors.

“Namfisa hereby informs the public that the registrar of pension funds is finalising the deregistration process for the following unlisted investment asset manager (Baobab Capital) and special purpose vehicle (Baobab Growth Fund) in terms of regulations made under the Pension Fund Act, 1956,” the advertisement read.

Namfisa said the law prohibits them from going into detail beyond announcing the deregistration of an entity.

“We are bound by the preservation of confidentiality and as such may not disclose information pertaining to the deregistration of Baobab Capital,” the authority said.

The advertisement continued to beg the public to refrain from engaging Baobab Capital and its Growth Fund.

Namfisa directed all public members with possible claims with the asset manager to the regulator for their claims – giving them until 16 October for submissions.

Baobab Capital, which is supposed to provide a funding gap faced by entrepreneurs and SMEs in Namibia and across southern Africa, managed to mobilise N$140 million, mostly from public servants’ pensions.

Despite Namfisa refusing to divulge more information, the Government Institutions Pension Fund, which has committed money to Baobab Capital and its growth fund, has released a statement last week clearing the air.

The fund said “last year, the GIPF discovered some irregularities through the SPV’s auditors”.

After the discoveries, the board of the special purpose vehicle (SPV), on recommendation of the GIPF, commissioned an independent investigation by APEX Fund Services to identify issues flagged by the auditors.

GIPF committed N$140 million in October 2016 to the only SPV which has a venture capital mandate to invest in start-up companies.

“The monies are committed over a 10-year period, as of July 2020. An amount of N$87 million has been drawn down by the SPV and is currently invested in various portfolio companies, which are still on track to fulfilling their mandates,” said David Nuyoma, principal officer of the GIPF.

In the statement the GIPF said that despite the deregistration process initiated, the underlying companies and investments in which the SPV has invested on behalf of the GIPF, remains safe and sound.

“GIPF would like to assure the portfolio companies under the SPV that it is working speedily to replace the directors of the SPV who have resigned,” read the statement.

After the auditors’ discoveries, the GIPF requested the directors of the SPV to take remedial action, and most of the issues exposed by the investigations were subsequently attended to and rectified by the fund manager and the SPV – until the directors of the SPV resigned on 8 September.

However, it seems Namfisa is not satisfied with the progress made in rectifying the irregularities.

After conducting their own investigation together with the findings of the investigations by APEX Fund Services they decided to deregister the fund manager and the SPV.

Baobab Capital and its SPV were investing in the unlisted space where entrepreneurs in the region are struggling to access the capital required to scale their businesses.

Email: erastus@namibian.com.na

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