Outcome of GIPF probe expected soon

A FORENSIC investigation into the Government Institutions Pension Fund (GIPF) Development Capital Portfolio is “at a highly sensitive stage” and any public comment could jeopardise the outcome of the probe, Namfisa spokesperson Ebben Kalondo has indicated.

Questions about the probe, now more than nine months in progress, sprung to the fore again after the sudden resignation over two weeks ago of Namfisa official Marcelina Gaoses. Gaoses was one of the key Namibian Financial Institutions Supervisory Authority (Namfisa) managers responsible for the supervising of public pension funds.She was overseeing the GIPF probe at the time of her sudden and unexplained resignation.”We just cannot talk about any of this at this stage.Things are taking on a very serious nature and to say anything about it now could make things very difficult,” Kalondo said of the probe.A South African auditing firm, Nkonki Sizwe Ntsaluba, in partnership with local auditors Saunderson, Theron and Associates, were commissioned late last year to perform a forensic audit on the Development Capital Portfolio (DCP) loan book after it emerged that the GIPF had lent nearly N$636,1 million to various start-up BEE businesses between 2000 and 2002.Finance Minister Sarah Kuugongelwa-Amadhila late last year announced the probe in Parliament after the ruling party came under fire for turning a blind eye to alleged politically sanctioned looting of the State pension fund.While some of these start-up businesses managed to keep their part of the bargain, many others failed miserably.They owe millions to the civil servants’ pension fund.At that stage, the DCP was administered under sub-contract by Sanlam Investment Management, a local affiliate of the South African insurance giant.Following the spectacular failure of some of these BEE companies over the past three years, the DCP stopped issuing any new loans on their books, which GIPF’s financial manager Gunton Cloete said at that stage stood at N$750 million.The forensic probe got off to a shaky start when a laptop computer belonging to one of the auditors was stolen from Namfisa’s offices in early November, while wallets and other personal valuables were left behind.The initial report submitted by the NSN investigation earlier this year, however, prompted Namfisa to ask for a further investigation into all companies funded under the DCP, a senior Namfisa official told The Namibian.This would include performing a due-diligence study on each company to determine whether assets and liabilities listed by such companies did in fact exist, the official said.Of particular interest would be the cross-shareholdings and over-lapping directorships in companies that benefited from DCP loans between a small group of politically well-connected people, many of them officials in Government.In many cases, companies that borrowed from the GIPF’s development portfolio had also borrowed money from other State-funded credit facilities like the Development Bank and the Mineral Fund administered by the Ministry of Mines and Energy.An analysis of companies funded by the DCP showed that many of them were audited by Saunderson, Theron & Associates – the same company now appointed to probe the GIPF’s DCP book.Senior partner Rudi Theron has previously denied that this was in conflict with the Namfisa assignment.GIPF CEO Primus Hango, in a written response received earlier, declined to answer any questions on the outcome of the audit, and specifically on the future of the Omaheke Tannery and Leather Processing Company.The Namibian wanted to know if the tannery, kickstarted with a N$23 million DCP loan, would also be revived as part of entrepreneur Sidney Martin’s Witvlei Meat Company, which took over the failed Uri !Ubis Abattoir two months ago.Kalondo stressed to The Namibian a week ago that the “incredible sensitivity” of the audit made it difficult to comment on any of the ancillary matters, but insisted that the audit would be completed “very soon”.John Grobler is a freelance journalist; 081 240 1587Gaoses was one of the key Namibian Financial Institutions Supervisory Authority (Namfisa) managers responsible for the supervising of public pension funds.She was overseeing the GIPF probe at the time of her sudden and unexplained resignation.”We just cannot talk about any of this at this stage.Things are taking on a very serious nature and to say anything about it now could make things very difficult,” Kalondo said of the probe.A South African auditing firm, Nkonki Sizwe Ntsaluba, in partnership with local auditors Saunderson, Theron and Associates, were commissioned late last year to perform a forensic audit on the Development Capital Portfolio (DCP) loan book after it emerged that the GIPF had lent nearly N$636,1 million to various start-up BEE businesses between 2000 and 2002.Finance Minister Sarah Kuugongelwa-Amadhila late last year announced the probe in Parliament after the ruling party came under fire for turning a blind eye to alleged politically sanctioned looting of the State pension fund.While some of these start-up businesses managed to keep their part of the bargain, many others failed miserably.They owe millions to the civil servants’ pension fund.At that stage, the DCP was administered under sub-contract by Sanlam Investment Management, a local affiliate of the South African insurance giant.Following the spectacular failure of some of these BEE companies over the past three years, the DCP stopped issuing any new loans on their books, which GIPF’s financial manager Gunton Cloete said at that stage stood at N$750 million.The forensic probe got off to a shaky start when a laptop computer belonging to one of the auditors was stolen from Namfisa’s offices in early November, while wallets and other personal valuables were left behind.The initial report submitted by the NSN investigation earlier this year, however, prompted Namfisa to ask for a further investigation into all companies funded under the DCP, a senior Namfisa official told The Namibian.This would include performing a due-diligence study on each company to determine whether assets and liabilities listed by such companies did in fact exist, the official said.Of particular interest would be the cross-shareholdings and over-lapping directorships in companies that benefited from DCP loans between a small group of politically well-connected people, many of them officials in Government.In many cases, companies that borrowed from the GIPF’s development portfolio had also borrowed money from other State-funded credit facilities like the Development Bank and the Mineral Fund administered by the Ministry of Mines and Energy.An analysis of companies funded by the DCP showed that many of them were audited by Saunderson, Theron & Associates – the same company now appointed to probe the GIPF’s DCP book.Senior partner Rudi Theron has previously denied that this was in conflict with the Namfisa assignment.GIPF CEO Primus Hango, in a written response received earlier, declined to answer any questions on the outcome of the audit, and specifically on the future of the Omaheke Tannery and Leather Processing Company.The Namibian wanted to know if the tannery, kickstarted with a N$23 million DCP loan, would also be revived as part of entrepreneur Sidney Martin’s Witvlei Meat Company, which took over the failed Uri !Ubis Abattoir two months ago. Kalondo stressed to The Namibian a week ago that the “incredible sensitivity” of the audit made it difficult to comment on any of the ancillary matters, but insisted that the audit would be completed “very soon”.John Grobler is a freelance journalist; 081 240 1587