NDC bosses found guilty

NAMIBIA Development Corporation (NDC) and Offshore Development Corporation (ODC) Managing Director Abdool Aboobakar has been found guilty on all the charges he faced for recklessly investing N$55 million of the NDC’s money with the ODC.

NDC Finance Manager Addis Faul was found guilty on all but one of the same charges. ‘BOARD KEPT IN DARK’ A disciplinary committee concluded last week that the pair had acted in secret when they first began their investment relationship with the ODC, and had kept management and the board in the dark about actions related to the NDC money being transferred to the ODC for investment with dubious investment company Great Triangle Investments.The NDC’s N$55 million formed part of the N$100 million the ODC invested with Great Triangle Investments from 2003, and which to date remains irrecoverable.While Aboobakar chose not to testify in his own defence, the disciplinary committee ruled that Faul’s testimony appeared to be untruthful – that he was an evasive witness who had given non-answers to clear questions.Aboobakar and Faul will be granted an opportunity to rebut the findings of the disciplinary committee before punishment is meted out.The two were found guilty of gross negligence, poor performance and exceeding their powers.Aboobakar was additionally found guilty of dereliction of duties and function.The five witnesses called to testify before the hearing claimed that Aboobakar and Faul had acted without their knowledge in investing NDC money.Board Chairperson John Nekwaya testified that the board had learned of the NDC investment with the ODC through the press, although the NDC’s investment policy stipulated that board approval was required for such transactions, particularly for amounts over N$500 000 and for cross-border transactions.RESERVATIONS The disciplinary hearing revealed that the investments were never reflected in the financial statements, and so the board had no way of knowing about them.Witnesses all said that when they did learn of the investment (Faul asked for management’s approval for the reinvestment of N$13 million despite never asking for their approval to invest the money in the first place), they expressed reservations about whether the ODC qualified as an investment house.Management then resolved that it must be notified about intentions to invest in future.Despite Faul having to travel to Cape Town to trace the return of an initial amount of N$13 million, he and Aboobakar continued to fling more money the ODC’s way for investment with Great Triangle Investments.Witnesses told the disciplinary committee that Faul said the reinvested money could be returned in four weeks, but this never happened.’SURREAL EXPECTATIONS’ Managers in charge of Government projects said they were concerned that their funds earmarked for particular developments were being used for investment and that Aboobakar and Faul kept them in the dark on what was happening to their project funds.In 2004, development projects could not be executed and had to be funded with money from the rolling budget for 2005-06.NDC managers testified that although they were consulted on issues involving the running of the corporation, this did not apply to investments and that they had learned of the botched deals from the press.The witnesses also accused Faul and Aboobakar of not giving them the full financial picture regarding the corporation and of creating an impression that funds were transferred to the ODC’s call accounts at commercial banks.Transfer-instruction letters did not specify the interest period and were addressed to the commercial banks.One manager testified that Faul and Aboobakar indicated that the invested money was guaranteed by the ODC.The disciplinary committee rejected most of Faul’s explanations about the investments, saying they found them “surrealistic”.Faul had argued that the board had no role to play in the placement of investments and further that the NDC had not suffered losses because of his actions because the NDC had been divested and its investments transferred to the ODC.The disciplinary committee found that the pair had acted in a grossly negligent manner because they were indifferent to the risky nature of the investments and they failed to obtain proper securities or guarantees.”Failure to testify and having regard to the surrounding circumstances has led us to infer that no due diligence was done on the company where the money was ultimately invested and he was grossly negligent to advise the NDC to invest with the ODC.The only way that this inference could have been rebutted was through his testimony,” the disciplinary committee remarked on Aboobakar’s silence during the hearing.The disciplinary committee said it was satisfied that witnesses had been truthful in saying that the two accused had acted in secret.The disciplinary committee also rejected Faul’s assertion that the NDC had not suffered any losses as a result of the investment.’BOARD KEPT IN DARK’ A disciplinary committee concluded last week that the pair had acted in secret when they first began their investment relationship with the ODC, and had kept management and the board in the dark about actions related to the NDC money being transferred to the ODC for investment with dubious investment company Great Triangle Investments.The NDC’s N$55 million formed part of the N$100 million the ODC invested with Great Triangle Investments from 2003, and which to date remains irrecoverable.While Aboobakar chose not to testify in his own defence, the disciplinary committee ruled that Faul’s testimony appeared to be untruthful – that he was an evasive witness who had given non-answers to clear questions.Aboobakar and Faul will be granted an opportunity to rebut the findings of the disciplinary committee before punishment is meted out. The two were found guilty of gross negligence, poor performance and exceeding their powers.Aboobakar was additionally found guilty of dereliction of duties and function.The five witnesses called to testify before the hearing claimed that Aboobakar and Faul had acted without their knowledge in investing NDC money.Board Chairperson John Nekwaya testified that the board had learned of the NDC investment with the ODC through the press, although the NDC’s investment policy stipulated that board approval was required for such transactions, particularly for amounts over N$500 000 and for cross-border transactions.RESERVATIONS The disciplinary hearing revealed that the investments were never reflected in the financial statements, and so the board had no way of knowing about them.Witnesses all said that when they did learn of the investment (Faul asked for management’s approval for the reinvestment of N$13 million despite never asking for their approval to invest the money in the first place), they expressed reservations about whether the ODC qualified as an investment house.Management then resolved that it must be notified about intentions to invest in future.Despite Faul having to travel to Cape Town to trace the return of an initial amount of N$13 million, he and Aboobakar continued to fling more money the ODC’s way for investment with Great Triangle Investments.Witnesses told the disciplinary committee that Faul said the reinvested money could be returned in four weeks, but this never happened. ‘SURREAL EXPECTATIONS’ Managers in charge of Government projects said they were concerned that their funds earmarked for particular developments were being used for investment and that Aboobakar and Faul kept them in the dark on what was happening to their project funds.In 2004, development projects could not be executed and had to be funded with money from the rolling budget for 2005-06.NDC managers testified that although they were consulted on issues involving the running of the corporation, this did not apply to investments and that they had learned of the botched deals from the press.The witnesses also accused Faul and Aboobakar of not giving them the full financial picture regarding the corporation and of creating an impression that funds were transferred to the ODC’s call accounts at commercial banks.Transfer-instruction letters did not specify the interest period and were addressed to the commercial banks.One manager testified that Faul and Aboobakar indicated that the invested money was guaranteed by the ODC.The disciplinary committee rejected most of Faul’s explanations about the investments, saying they found them “surrealistic”.Faul had argued that the board had no role to play in the placement of investments and further that the NDC had not suffered losses because of his actions because the NDC had been divested and its investments transferred to the ODC.The disciplinary committee found that the pair had acted in a grossly negligent manner because they were indifferent to the risky nature of the investments and they failed to obtain proper securities or guarantees.”Failure to testify and having regard to the surrounding circumstances has led us to infer that no due diligence was done on the company where the money was ultimately invested and he was grossly negligent to advise the NDC to invest with the ODC.The only way that this inference could have been rebutted was through his testimony,” the disciplinary committee remarked on Aboobakar’s silence during the hearing.The disciplinary committee said it was satisfied that witnesses had been truthful in saying that the two accused had acted in secret.The disciplinary committee also rejected Faul’s assertion that the NDC had not suffered any losses as a result of the investment.