Kapia falters at altar of truth

HAS Paulus Kapia been telling the truth, and the whole truth, in the High Court this week? Strong indications that serious doubts were being harboured about this became all too apparent as Kapia continued to give evidence before Acting Judge Raymond Heathcote yesterday.

Kapia is a witness in a Companies Act inquiry into a N$30 million investment that the Social Security Commission placed with Avid Investment Corporation, a company of which he had been a director, in late January this year. That money – public money meant to be used for welfare purposes – was supposed to be repaid in late May.To date it has not been returned to the SSC.Kapia gave strings of vague and evasive answers during his second day on the witness stand.It was a pattern that appeared to test Acting Judge Heathcote’s patience to the limit, until he warned the Deputy Minister and Swapo Party Youth League Secretary that avoiding questions was the same as not answering them.If he did not answer the questions put to him, he would be charged with contempt of court, the Acting Judge warned.Kapia continued in the same vein, though, answering in broad strokes and with generalities when he was asked, again and again, for specifics, until Acting Judge Heathcote stepped in once more, asking Kapia’s legal counsel, Sisa Namandje, why his client should not be incarcerated until he decided to speak the truth and to answer questions fully and satisfactorily.The SSC’s leading counsel, Andrew Corbett, also joined the fray, telling the court that in his view Kapia was being a recalcitrant witness.Remarked the Acting Judge: “This general, vague avoiding is not impressing me.”Kapia did not only face this sort of adverse feedback about his way of answering questions.The content of some of his answers about how he carried out his duties as a director of Avid – or rather, as it turned out, did not carry out the duties that the Companies Act requires of a director – also did him no favours.Acting Judge Heathcote warned him at one stage that it was his view that from Kapia’s own version he had been reckless in his conduct as a director.The effect of this, the Acting Judge explained, is that there was a case for Avid’s provisional liquidators to go after Kapia personally as a director – that is, to set their sights on his personal assets if need be, in an effort to recover money to cover the company’s liabilities.Those liabilities include not only the N$30 million that is due to the SSC, but also N$7 million that the Swapo-owned Kalahari Holdings invested through Avid, and which will be due to be repaid in August, the court heard earlier this week.SIMPLE QUESTIONS, VAGUE ANSWERS In essence two questions, even if they were asked repeatedly in other forms, took up much of the close to four hours that Kapia gave evidence yesterday.These are: What did Kapia know of the role played in Avid’s affairs by Lazarus Kandara, who was accused of involvement in dubious insurance deals with the SSC during the proceedings of a Presidential Commission of Inquiry into the affairs of the SSC some two and a half years ago, and when he did know this? Kandara in effect was in full control of Avid, the former chairperson of the company’s board, Inez /Gâses, told the court earlier this week.Although he was never officially appointed as the company’s chief executive officer, he acted as such.This included having signing powers on the company’s bank accounts.Kandara was the person who actually ordered the transfer of N$29,5 million of the SSC’s investment money to another company, Namangol Investments, two days after the SSC had transferred N$30 million to Avid, the court has heard.From Namangol, N$20 million was transferred to a South African bank account of a claimed financial markets trader, Alan Rosenberg, while the rest of the money was split up and paid out and transferred in various directions.KEPT IN THE DARK As Kapia would have the court believe from the evidence that he gave on Wednesday afternoon, he only learned of Kandara’s involvement with Avid on July 10.It was also only on that date that he got to know of the role that Namangol Investments and that company’s Chief Executive Officer, Nico Josea, had played in the passing on of the SSC investment, he said.Before then, he did not even know of Namangol or Josea, he stated.Soon after he continued giving evi­dence yesterday morning, though, the Acting Judge confronted Kapia with information from a newspaper report dating from February, where it was stated that Namangol Investments had pledged N$310 000 to the Sam Nujoma Foundation at a gala dinner at which the foundation was launched.That pledge was the biggest received that evening.But according to Kapia, who said he attended the dinner, he did not hear the name of either the company or the person – Josea – who made that pledge.It also soon emerged that, while he claimed that he got to know of Kandara’s role in Avid only on July 10, and that he had known Kandara before that just “as a person” that he had met, Kapia had had several meetings with Kandara that were directly related to Avid business before that date.According to Kapia, he became a director of Avid in April last year after he had been approached on that score by Ralph Blaauw, currently Acting Secretary General of the National Youth Council.When he was asked why Blaauw, who is not a director of Avid, would have approached him, Kapia indicated that this was “as a comrade”.In January this year, before Avid clinched the deal with the SSC, he and Blaauw had a meeting with Kandara at a coffee shop in Windhoek.Kapia was vague about where exactly this took place.He was similarly vague about what exactly was discussed, saying first that it was “business”, then, when asked whether it was about investments, confirming that it was indeed, and later saying that the purpose of the meeting was to get some explanations from Kandara about investment options that were available, in general.In March, there was another meeting with Kandara and other Avid directors, Kapia admitted.He claimed that Kandara had been invited to that meeting to give an explanation about a supposed financial guarantee that Alan Rosenberg had given Avid for the investment that had been placed with him.Another meeting where Kandara was also present took place in April, when he wanted to get an explanation about an Insight magazine report on an investment deal that Avid had done with the Navachab gold mine.Also, there may have been cellphone conversations between him and Kandara as far back as some time in 2004, Kapia further acknowledged, but only after persistent questioning from Corbett.Never during all those contacts did Kandara tell him that he (Kandara) was actually working for Avid as its CEO, Kapia claimed.HANDS-OFF DIRECTOR As Kapia would also appear to have the court believe, he was wholly uninformed about what was going on in Avid while he was a director.Not only did he not know who the company’s de facto CEO was, but he also did not know that this person, Kandara, had signing powers on the company’s bank accounts.He further did not know that Avid never kept proper financial accounting records, he claimed.As far as he knew, Avid had one single employee, who was the company’s receptionist.Was she then supposed to do the company’s accounting records, Corbett asked.”Ja, if she’s well informed she can do it,” Kapia replied.Having heard the Acting Judge state that there might be a case to make out that he had acted recklessly as a director, Kapia protested: “I don’t feel so far that I acted negligently.I want to put that on record.””So who did you think was doing the day-to-day accounting, the hands-on business?” Corbett asked him at one stage.”I don’t know,” Kapia said.Corbett moved on to ask what qualities Kapia thought he brought to the Avid board.”Qualities?” Kapia replied.”What skills?” Corbett tried again.”Skills?” Kapia answered.”What contributions could you make?” Corbett tried once more.”Ja, if we had a board meeting and discussed, I could make my contribution,” Kapia ventured.The only problem was that they never actually had any board meetings, except for one in early February in order to delegate him and /Gâses to act on Avid’s behalf in dealings with the SSC, Kapia also admitted.And then, no minutes of board meetings were kept in any event.Kapia is set to continue giving evidence today.* See also Editorial on page 7, and letters on pages 14 and 15.That money – public money meant to be used for welfare purposes – was supposed to be repaid in late May.To date it has not been returned to the SSC.Kapia gave strings of vague and evasive answers during his second day on the witness stand.It was a pattern that appeared to test Acting Judge Heathcote’s patience to the limit, until he warned the Deputy Minister and Swapo Party Youth League Secretary that avoiding questions was the same as not answering them. If he did not answer the questions put to him, he would be charged with contempt of court, the Acting Judge warned.Kapia continued in the same vein, though, answering in broad strokes and with generalities when he was asked, again and again, for specifics, until Acting Judge Heathcote stepped in once more, asking Kapia’s legal counsel, Sisa Namandje, why his client should not be incarcerated until he decided to speak the truth and to answer questions fully and satisfactorily.The SSC’s leading counsel, Andrew Corbett, also joined the fray, telling the court that in his view Kapia was being a recalcitrant witness.Remarked the Acting Judge: “This general, vague avoiding is not impressing me.”Kapia did not only face this sort of adverse feedback about his way of answering questions.The content of some of his answers about how he carried out his duties as a director of Avid – or rather, as it turned out, did not carry out the duties that the Companies Act requires of a director – also did him no favours.Acting Judge Heathcote warned him at one stage that it was his view that from Kapia’s own version he had been reckless in his conduct as a director.The effect of this, the Acting Judge explained, is that there was a case for Avid’s provisional liquidators to go after Kapia personally as a director – that is, to set their sights on his personal assets if need be, in an effort to recover money to cover the company’s liabilities.Those liabilities include not only the N$30 million that is due to the SSC, but also N$7 million that the Swapo-owned Kalahari Holdings invested through Avid, and which will be due to be repaid in August, the court heard earlier this week.SIMPLE QUESTIONS, VAGUE ANSWERS In essence two questions, even if they were asked repeatedly in other forms, took up much of the close to four hours that Kapia gave evidence yesterday.These are: What did Kapia know of the role played in Avid’s affairs by Lazarus Kandara, who was accused of involvement in dubious insurance deals with the SSC during the proceedings of a Presidential Commission of Inquiry into the affairs of the SSC some two and a half years ago, and when he did know this? Kandara in effect was in full control of Avid, the former chairperson of the company’s board, Inez /Gâses, told the court earlier this week.Although he was never officially appointed as the company’s chief executive officer, he acted as such.This included having signing powers on the company’s bank accounts.Kandara was the person who actually ordered the transfer of N$29,5 million of the SSC’s investment money to another company, Namangol Investments, two days after the SSC had transferred N$30 million to Avid, the court has heard.From Namangol, N$20 million was transferred to a South African bank account of a claimed financial markets trader, Alan Rosenberg, while the rest of the money was split up and paid out and transferred in various directions.KEPT IN THE DARK As Kapia would have the court believe from the evidence that he gave on Wednesday afternoon, he only learned of Kandara’s involvement with Avid on July 10.It was also only on that date that he got to know of the role that Namangol Investments and that company’s Chief Executive Officer, Nico Josea, had played in the passing on of the SSC investment, he said.Before then, he did not even know of Namangol or Josea, he stated.Soon after he continued giving evi­dence yesterday morning, though, the Acting Judge confronted Kapia with information from a newspaper report dating from February, where it was stated that Namangol Investments had pledged N$310 000 to the Sam Nujoma Foundation at a gala dinner at which the foundation was launched.That pledge was the biggest received that evening.But according to Kapia, who said he attended the dinner, he did not hear the name of either the company or the person – Josea – who made that pledge.It also soon emerged that, while he claimed that he got to know of Kandara’s role in Avid only on July 10, and that he had known Kandara before that just “as a person” that he had met, Kapia had had several meetings with Kandara that were directly related to Avid business before that date.According to Kapia, he became a director of Avid in April last year after he had been approached on that score by Ralph Blaauw, currently Acting Secretary General of the National Youth Council.When he was asked why Blaauw, who is not a director of Avid, would have approached him, Kapia indicated that this was “as a comrade”.In January this year, before Avid clinched the deal with the SSC, he and Blaauw had a meeting with Kandara at a coffee shop in Windhoek.Kapia was vague about where exactly this took place.He was similarly vague about what exactly was discussed, saying first that it was “business”, then, when asked whether it was about investments, confirming that it was indeed, and later saying that the purpose of the meeting was to get some explanations from Kandara about investment options that were available, in general.In March, there was another meeting with Kandara and other Avid directors, Kapia admitted.He claimed that Kandara had been invited to that meeting to give an explanation about a supposed financial guarantee that Alan Rosenberg had given Avid for the investment that had been placed with him.Another meeting where Kandara was also present took place in April, when he wanted to get an explanation about an Insight magazine report on an investment deal that Avid had done with the Navachab gold mine.Also, there may have been cellphone conversations between him and Kandara as far back as some time in 2004, Kapia further acknowledged, but only after persistent questioning from Corbett.Never during all those contacts did Kandara tell him that he (Kandara) was actually working for Avid as its CEO, Kapia claimed.HANDS-OFF DIRECTOR As Kapia would also appear to have the court believe, he was wholly uninformed about what was going on in Avid while he was a director.Not only did he not know who the company’s de facto CEO was, but he also did not know that this person, Kandara, had signing powers on the company’s bank accounts.He further did not know that Avid never kept proper financial accounting records, he claimed.As far as he knew, Avid had one single employee, who was the company’s receptionist.Was she then supposed to do the company’s accounting records, Corbett asked.”Ja, if she’s well informed she can do it,” Kapia replied.Having heard the Acting Judge state that there might be a case to make out that he had acted recklessly as a director, Kapia protested: “I don’t feel so far that I acted negligently.I want to put that on record.””So who did you think was doing the day-to-day accounting, the hands-on business?” Corbett asked him at one stage.”I don’t know,” Kapia said.Corbett moved on to ask what qualities Kapia thought he brought to the Avid board.”Qualities?” Kapia replied.”What skills?” Corbett tried again.”Skills?” Kapia answered.”What contributions could you make?” Corbett tried once more.”Ja, if we had a board meeting and discussed, I could make my contribution,” Kapia ventured.The only problem was that they never actually had any board meetings, except for one in early February in order to delegate him and /Gâses to act on Avid’s behalf in dealings with the SSC, Kapia also admitted.And then, no minutes of board meetings were kept in any event.Kapia is set to continue giving evidence today.* See also Editorial on page 7, and letters on pages 14 and 15.