N$30-million Avid-SSC bungle returns to court

THE court battle over the financial fortunes of Nico Josea – one of the main figures in the web of money transfers that saw a N$30 million investment from the Social Security Commission disappear last year – is set to continue for a third day in the High Court in Windhoek today.

Judge President Petrus Damaseb on Thursday started hearing arguments in three cases in which he is basically being asked to declare Josea and his asset management company, Namangol Investments, bankrupt. The hearing continued on Friday, and is set to stretch into a third day today, with Josea’s legal counsel, Jaco van Rooyen, to continue with the address to the court that he started on Friday.Van Rooyen was still dealing with more technical aspects of Josea’s defence against the liquidation application that his company faces and the sequestration application that he is facing when the court adjourned on Friday afternoon.The SSC decided to place a N$30 million investment with an unproven – but politically connected – asset-management company, Avid Investment Corporation, in late January last year.Of this, N$29,5 million was transferred onward by Avid to a bank account of Namangol Investments, from where N$20 million was in turn transferred to a bank account of a purported South African financial broker, Alan Rosenberg.By mid-March last year, Rosenberg had in turn again repaid N$15 million to Josea, who then spent this money on donations to his church, buying assets for himself and lending money to friends and relatives.The SSC’s investment with Avid was set to be repaid by late May last year, but Avid was unable to meet that deadline, and was placed under provisional liquidation in July.The liquidator who was put in charge of Avid, Eric Knouwds, soon turned his sights on Namangol Investments and Josea in his efforts to recover the money that Avid owed the SSC.Josea and his company were placed under provisional sequestration and liquidation orders respectively in late July.The question central to the legal arguments is whether those provisional orders should now be confirmed as final orders.Andrew Corbett, representing Knouwds, asked Judge President Damaseb last week to confirm both orders.The basis for that would be twofold, he said: that Josea and Namangol Investments are unable to pay their debts, and that Josea had been mismanaging the affairs of Namangol Investments to such an extent that the court should step in and finally place the company under the control of a liquidator.Josea and Namangol Investments have claimed that, in fact, the money that Avid transferred to Namangol was to be invested for a period of one year and a day, with the result that this investment was only to mature and due to be repaid to Avid by the end of the first week of March.That deadline has arrived, and still there was no sign of the money reappearing, Corbett told the court on Thursday.He told the Judge President that it was clear that Namangol Investments and Josea had been defrauding Avid.Their claims were that the money for the repayment was to come from a further investment that Rosenberg had supposedly made, and which was supposed to deliver a return of some US$38,9 million, of which US$17,9 million was due to be paid to Namangol Investments, around now.But that investment, Corbett charged, had been shown to be “entirely fictitious” and “bogus”, “a fairy tale”, and “utter rubbish”.Similar terms that were used in an affidavit from Knouwds to cast doubt on Josea’s and his company’s defence have taken up much of Van Rooyen’s arguments during the hearing so far.Van Rooyen argued for starters that the legal documents that set the cases against Josea and Namangol in motion had not been served on Josea as required by court rules until more than two months after the proceedings started.This in itself made the whole process null and void, he argued.Large parts of affidavits from Knouwds should also be struck out by the court, he further argued.These parts – most of which deal with Knouwds’s claims to have evidence that the supposed US$17,9 million investment pay-out does not exist, and that bogus legal proceedings between Namangol Investments and Rosenberg were used to get Rosenberg’s bank to pay out the N$15 million that then landed in Josea’s pockets – are meant to defame, to harass, and to annoy his client; they are vexatious, not based on primary facts, irrelevant, repetitious and merely opinion, Van Rooyen charged in his arguments.The hearing continued on Friday, and is set to stretch into a third day today, with Josea’s legal counsel, Jaco van Rooyen, to continue with the address to the court that he started on Friday.Van Rooyen was still dealing with more technical aspects of Josea’s defence against the liquidation application that his company faces and the sequestration application that he is facing when the court adjourned on Friday afternoon.The SSC decided to place a N$30 million investment with an unproven – but politically connected – asset-management company, Avid Investment Corporation, in late January last year.Of this, N$29,5 million was transferred onward by Avid to a bank account of Namangol Investments, from where N$20 million was in turn transferred to a bank account of a purported South African financial broker, Alan Rosenberg.By mid-March last year, Rosenberg had in turn again repaid N$15 million to Josea, who then spent this money on donations to his church, buying assets for himself and lending money to friends and relatives.The SSC’s investment with Avid was set to be repaid by late May last year, but Avid was unable to meet that deadline, and was placed under provisional liquidation in July.The liquidator who was put in charge of Avid, Eric Knouwds, soon turned his sights on Namangol Investments and Josea in his efforts to recover the money that Avid owed the SSC.Josea and his company were placed under provisional sequestration and liquidation orders respectively in late July.The question central to the legal arguments is whether those provisional orders should now be confirmed as final orders.Andrew Corbett, representing Knouwds, asked Judge President Damaseb last week to confirm both orders.The basis for that would be twofold, he said: that Josea and Namangol Investments are unable to pay their debts, and that Josea had been mismanaging the affairs of Namangol Investments to such an extent that the court should step in and finally place the company under the control of a liquidator.Josea and Namangol Investments have claimed that, in fact, the money that Avid transferred to Namangol was to be invested for a period of one year and a day, with the result that this investment was only to mature and due to be repaid to Avid by the end of the first week of March.That deadline has arrived, and still there was no sign of the money reappearing, Corbett told the court on Thursday.He told the Judge President that it was clear that Namangol Investments and Josea had been defrauding Avid.Their claims were that the money for the repayment was to come from a further investment that Rosenberg had supposedly made, and which was supposed to deliver a return of some US$38,9 million, of which US$17,9 million was due to be paid to Namangol Investments, around now.But that investment, Corbett charged, had been shown to be “entirely fictitious” and “bogus”, “a fairy tale”, and “utter rubbish”.Similar terms that were used in an affidavit from Knouwds to cast doubt on Josea’s and his company’s defence have taken up much of Van Rooyen’s arguments during the hearing so far.Van Rooyen argued for starters that the legal documents that set the cases against Josea and Namangol in motion had not been served on Josea as required by court rules until more than two months after the proceedings started. This in itself made the whole process null and void, he argued.Large parts of affidavits from Knouwds should also be struck out by the court, he further argued.These parts – most of which deal with Knouwds’s claims to have evidence that the supposed US$17,9 million investment pay-out does not exist, and that bogus legal proceedings between Namangol Investments and Rosenberg were used to get Rosenberg’s bank to pay out the N$15 million that then landed in Josea’s pockets – are meant to defame, to harass, and to annoy his client; they are vexatious, not based on primary facts, irrelevant, repetitious and merely opinion, Van Rooyen charged in his arguments.