Namfisa called to account over missing millions

THE troubled financial supervisory authority Namfisa came under fire in Parliament yesterday about its role in the now liquidated Prowealth asset-management company, whose owner Riaan Potgieter committed suicide late last year.

‘Why did Namfisa not immediately appoint a curator for the Prowealth company immediately after the owner’s death, when it became crystal clear that it was in serious financial problems?’ DTA Chairman Johan de Waal asked Finance Minister Saara Kuugongelwa-Amadhila.Yesterday The Namibian published a front-page report that Potgieter allegedly embezzled around N$40 million entrusted to him by investors in Prowealth.’Can the Minister think of any reason why Namfisa should not be held liable for the loss of investments at Prowealth in the event that the company did not have sufficient professional indemnity insurance in place?’ De Waal wanted to know.’Did Namfisa ensure that the internal and external auditors of Prowealth complied with all the reporting requirements as stipulated by various laws like the Long-Term and Short-Term Insurance Act, the Investments of Funds Act and the Public Accounts and Auditors Act for instance?’ he asked.He further asked the Finance Minister whether certain assets of Prowealth were not perhaps sold or ‘otherwise alienated just before or just after the death of the company’s owner’. Namfisa’s role was to ‘improve the financial soundness of Namibia’s non-banking financial sector and to secure protection for all stakeholders in the industry, including consumers,’ De Waal quoted from Namfisa’s website. ‘Namfisa is funded with levies by financial companies and by each and everybody who has some form of insurance through another levy on each and every transaction made,’ the DTA leader said.Prowealth Asset Managers, a part of the Prowealth group that is in liquidation, received more than N$103,053 million from investors from October 2003 to May 2008, the company’s liquidator, Alwyn van Straten, has stated in an affidavit filed with the High Court.According to Van Straten, a forensic investigation of the company’s affairs has now shown that Potgieter ‘unlawfully and intentionally misappropriated’ more than N$39,9 million out of the more than N$103 million that investors paid to Prowealth to be invested on their behalf.A further amount of at least N$39 million is unaccounted for and could not be allocated to an investor of Prowealth Asset Managers, Van Straten has informed the court.He has stated that the investigation has so far shown that investors’ funds were not paid into a trust account of Prowealth Asset Managers, but instead went into another of the company’s bank accounts. According to Van Straten, it is apparent that Namfisa would have required Prowealth Asset Managers to pay investors’ money into a trust account.Van Straten charges in his affidavit that the companies and close corporations that Potgieter established were all part of a fraudulent scheme devised by Potgieter in which about N$79,9 million in trust monies received from investors were unlawfully and intentionally misappropriated by Potgieter and other related companies and close corporations in which he had an interest.Of this amount of some N$79,9 million, Potgieter unlawfully transferred at least N$20 million to various bank accounts in his own name, Van Straten is alleging.