A SECRET report into the affairs of the Namibia Estate Agents Board has revealed that the board illegally diverted funds meant to help victims of dodgy estate agents.
This is included in a preliminary assessment report compiled in 2014 on the duties and systems used by the Namibia Estate Agents Board (NEAB). The NEAB is a state-owned body which regulates the real estate profession. Its main function is to protect the public against unscrupulous agents, while maintaining the integrity of estate agents.
One of the key findings in the report is how the board diverted funds from an internal account called the fidelity fund.
The fidelity fund was created to protect the public in their dealings with registered estate agents in case they lose funds while dealing with the agents, for example deposits for rented property.
The fund has been growing since each registered estate agent must contribute to it when renewing their licences. The only time the fund needs to release money is when a member of the public can prove that an estate agent disappeared with their money.
The report, compiled by Eben de Klerk of ISG Risk Services and leaked to The Namibian, said the board illegally took a N$2,5 million loan from that fund on 31 December 2012.
That loan is now estimated to be worth around N$4 million. Sources said more money is being diverted from that account.
The report comes at a time when the board is divided over who should be included on the next board, amid allegations that some board members have been serving for too long over the past 26 years.
De Klerk warned that at the rate at which money was being spent, the fund would have a zero balance within seven years from 2014.
The fund is suffering damages, not only through the illegal loan transaction, but also through exposure to the risk of bad debts since the board cannot afford to repay this loan in the near future, the report said.
Unlike the real estate fund which is likely to diminish in less than a decade if a solution is not found, the report said the assets of the fidelity fund of legal practitioners under the Law Society of Namibia were worth N$150 million in 2014.
“This exposes the members of the board to personal liability. The Act does not indemnify members of the board from liability in this regard, and in fact criminalises failure to comply with the Act by any person” the report said.
The report stated that “all indications are that matters are becoming worse by the day and those current employees (at the board), no matter how responsibilities are restructured and circulated between them, do not have the skills and willingness to put in place the systems required to remedy the current situation”.
The report said the board members who were in charge when the decision to divert the money was made could be held responsible.
The board was advised to appreciate the exclusions and limitations of the professional indemnity insurance policy taken out by the board, if there is any.
“It is seldom that insurance companies will cover gross negligence, as is arguably the case in the matters discussed herein.
Professional indemnity insurance will also not cover any damages caused by intentional unlawful decisions taken by the board,” the consultant said, referring to the decision by the board to borrow money from the fidelity fund as being against the law.
NEAB chair Anne Gebhardt has served the board several times since 1992. Gebhardt said she was abroad, and needed more time to answer the questions emailed to her.
Annalie Aerla, who first became a board member in 1995, said her tenure ended around 2000 but she came back in 2013. Sources said Gebhardt and Aerla are among the names forwarded to the minister of industrialisation Immanuel Ngatjizeko for consideration for reappointment before he takes the list to Cabinet for endorsement.
No advert was placed to call for potential board members.
Ngatjizeko told on Monday that he had not yet received the names. “Maybe the names are still coming,” he said.
The minister further stated that the law which regulates the board is old, and needs to be amended. He promised that changes to the real estate law should be tabled in parliament this year.
