Now Avid moves to stonewall SSC probe

FOUR of the people the High Court wants to explain what happened to a N$30 million investment the Social Security Commission placed with an upstart company, Avid Investments, yesterday moved to stall an investigation on the deal.

Citing their constitutional right not to incriminate themselves, former Avid Investments directors Paulus Kapia, Inez /Gâses and Otniël Podewiltz, together with still-serving director Sharon Blaauw, gave notice that they intend to first challenge the Companies Act before the court proceeds with the probe on a deal that could still see the SSC lose N$30 million. In terms of that law, the four are compelled to give evidence in an enquiry on the investment.Lawyers representing the Avid directors are set to ask today that the enquiry into the N$30 million investment deal should be put on hold, until the constitutionality of the section of the Companies Act under which they are being compelled to testify has been determined by the court.Acting Judge Raymond Heathcote on Tuesday piled heavy pressure not just on Avid Investments, by granting the SSC an order for the provisional liquidation of the company, but also on Avid’s current and former directors, by ordering that they be subpoenaed to give evidence at an enquiry expected to focus on the whereabouts of N$30 million in public funds that the SSC entrusted to the company for investment.The enquiry is to be conducted in terms of section 417 of the Companies Act – but this is a section that lawyer Dirk Conradie, representing Podewiltz, yesterday attacked as allowing for a “very draconian” procedure.A preparatory stage of the enquiry was supposed to take place before the Acting Judge yesterday, when documents relevant to the N$30 million investment were supposed to be filed with the court and arranged for the start of the enquiry, which the Acting Judge had scheduled for today.INCRIMINATING Key figures in Avid Investments, including Swapo Youth League Secretary and Deputy Minister of Works Kapia, and the former Managing Director of Avid Investments, /Gâses, were present as required for the initial stage of the enquiry.Lawyer Sisa Namandje addressed the court on Kapia’s behalf.He told Acting Judge Heathcote that the constitutional attack would be directed against the entire section 417 of the Companies Act, and not just against the part that compels a witness to answer incriminating questions at an enquiry into the affairs of a company that is being wound up because it cannot pay its debts.In South Africa, the Constitutional Court ruled in 1995 already that the part of section 417 that compels a witness to answer all questions, even if the answers may incriminate the witness, is unconstitutional.The section also states that such incriminating answers may thereafter be used as evidence against the witness.Namibia’s Constitution also contains a provision that no one may be compelled to give evidence against themselves.THE SOUR DEAL Namandje told the Acting Judge that the constitutional attack would also be directed against the part of the Companies Act that in the first place enables the High Court to order that an enquiry be held.That is because that part of the law also enables the court to require that a witness should produce relevant documents to the court, which in themselves might constitute incriminating evidence, he indicated.Namandje told the court that that not only does Kapia want to first launch a constitutional challenge, but he also wants to be given more time to prepare for the intended enquiry, and he needed more time to instruct senior counsel to represent him in the matter./Gâses, Blaauw and Podewiltz have indicated in affidavits that they intend to follow the same course.Also present in court yesterday was Nico Josia, the person who, according to what Avid’s legal representative, Shafimana Ueitele, told the court on Tuesday, was in Johannesburg this week to try and arrange for the return of the N$30 million to the SSC.”You didn’t bring us the money?” Acting Judge Heathcote asked Josia after he had explained to him that like the other subpoenaed witnesses he also had a right to be legally represented at the intended enquiry.”No,” Josia answered with a wry smile.At the centre of the enquiry will be the question of what happened to N$30 million that the SSC agreed to invest through Avid in late January this year for a four-month period.According to the SSC that was after Kapia had been “applying pressure from higher political authority”, with it having been pointed out to the SSC that the Swapo Youth League apparently holds 80 per cent of the shares in Avid.By May 24 the investment period was over and N$31,47 million was supposed to be returned to the SSC.Close to two months later, the money has yet to reappear.In the meantime, though, the SSC claims, it has discovered that the N$30 million, which Avid undertook to invest in South Africa, appears to have found its way to a supposed investment company in Montevideo, Uruguay – or perhaps to a company in Texas, which however indicated in a communication to /Gâses that it had received only N$20 million from Avid to invest.The SSC was increasingly “constrained to conclude that the Avid investment is part of a fraudulent scheme and that such funds have in fact disappeared”, the court was informed in the application for Avid’s winding-up.In terms of that law, the four are compelled to give evidence in an enquiry on the investment. Lawyers representing the Avid directors are set to ask today that the enquiry into the N$30 million investment deal should be put on hold, until the constitutionality of the section of the Companies Act under which they are being compelled to testify has been determined by the court.Acting Judge Raymond Heathcote on Tuesday piled heavy pressure not just on Avid Investments, by granting the SSC an order for the provisional liquidation of the company, but also on Avid’s current and former directors, by ordering that they be subpoenaed to give evidence at an enquiry expected to focus on the whereabouts of N$30 million in public funds that the SSC entrusted to the company for investment.The enquiry is to be conducted in terms of section 417 of the Companies Act – but this is a section that lawyer Dirk Conradie, representing Podewiltz, yesterday attacked as allowing for a “very draconian” procedure.A preparatory stage of the enquiry was supposed to take place before the Acting Judge yesterday, when documents relevant to the N$30 million investment were supposed to be filed with the court and arranged for the start of the enquiry, which the Acting Judge had scheduled for today.INCRIMINATING Key figures in Avid Investments, including Swapo Youth League Secretary and Deputy Minister of Works Kapia, and the former Managing Director of Avid Investments, /Gâses, were present as required for the initial stage of the enquiry.Lawyer Sisa Namandje addressed the court on Kapia’s behalf.He told Acting Judge Heathcote that the constitutional attack would be directed against the entire section 417 of the Companies Act, and not just against the part that compels a witness to answer incriminating questions at an enquiry into the affairs of a company that is being wound up because it cannot pay its debts.In South Africa, the Constitutional Court ruled in 1995 already that the part of section 417 that compels a witness to answer all questions, even if the answers may incriminate the witness, is unconstitutional.The section also states that such incriminating answers may thereafter be used as evidence against the witness.Namibia’s Constitution also contains a provision that no one may be compelled to give evidence against themselves.THE SOUR DEAL Namandje told the Acting Judge that the constitutional attack would also be directed against the part of the Companies Act that in the first place enables the High Court to order that an enquiry be held.That is because that part of the law also enables the court to require that a witness should produce relevant documents to the court, which in themselves might constitute incriminating e
vidence, he indicated.Namandje told the court that that not only does Kapia want to first launch a constitutional challenge, but he also wants to be given more time to prepare for the intended enquiry, and he needed more time to instruct senior counsel to represent him in the matter./Gâses, Blaauw and Podewiltz have indicated in affidavits that they intend to follow the same course.Also present in court yesterday was Nico Josia, the person who, according to what Avid’s legal representative, Shafimana Ueitele, told the court on Tuesday, was in Johannesburg this week to try and arrange for the return of the N$30 million to the SSC.”You didn’t bring us the money?” Acting Judge Heathcote asked Josia after he had explained to him that like the other subpoenaed witnesses he also had a right to be legally represented at the intended enquiry.”No,” Josia answered with a wry smile.At the centre of the enquiry will be the question of what happened to N$30 million that the SSC agreed to invest through Avid in late January this year for a four-month period.According to the SSC that was after Kapia had been “applying pressure from higher political authority”, with it having been pointed out to the SSC that the Swapo Youth League apparently holds 80 per cent of the shares in Avid.By May 24 the investment period was over and N$31,47 million was supposed to be returned to the SSC.Close to two months later, the money has yet to reappear.In the meantime, though, the SSC claims, it has discovered that the N$30 million, which Avid undertook to invest in South Africa, appears to have found its way to a supposed investment company in Montevideo, Uruguay – or perhaps to a company in Texas, which however indicated in a communication to /Gâses that it had received only N$20 million from Avid to invest.The SSC was increasingly “constrained to conclude that the Avid investment is part of a fraudulent scheme and that such funds have in fact disappeared”, the court was informed in the application for Avid’s winding-up.