A retired army general from the Democratic Republic of Congo (DRC) has won a court battle against the Bank of Namibia, after the central bank decided to forfeit to the state more than N$40 million in a Namibian bank account in the general’s name.
In a judgement delivered in the Windhoek High Court this week, deputy judge president Hannelie Prinsloo reviewed and set aside a decision of the Bank of Namibia (BoN) to forfeit retired general François Olenga’s funds in an account with Nedbank Namibia.
Prinsloo also reviewed and set aside “all the associated processes and decisions preceding and on the basis of which the forfeiture order of 4 August 2023 was made”. This includes an order in terms of which access to Olenga’s bank account was blocked in August 2020.
Olenga asked the court to make the orders in an application filed at the High Court in October 2023.
Olenga also asked the court to declare that the central bank’s Foreign Currency Exchange Manual is invalid, null and void. Prinsloo refused to make such an order, but ordered the BoN to publish the manual in the Government Gazette within three months.
The BoN notified the court on Wednesday that it intends to appeal to the Supreme Court against Prinsloo’s judgement. An appeal would have the effect of suspending the orders made by Prinsloo.
Olenga informed the court in a sworn statement that BoN deputy governor Leonie Dunn in August 2023 issued a notice that the Bank of Namibia decided the funds in his investment account with Nedbank Namibia should be forfeited to the state.
The account had a positive balance of about N$39 million at that stage. With the funds continuing to grow through interest, the account had about N$40.5 million in it in April 2024, the court was also informed.
The BoN exchange control department informed the bank’s board of directors in a memorandum in July 2023 that the bank was notified that Olenga received payments totalling N$70.5 million in Namibian bank accounts in his name from July 2010 to February 2015. The payments came from Hungary, China and the West Indies, via a company registered in the United States of America.
The BoN board was also informed that, in addition to the funds in his Nedbank investment account, Olenga had about N$39 million in an account at the defunct Small and Medium Enterprises Bank, and that the BoN has had that money attached in terms of Namibia’s Exchange Control Regulations.Olenga said Nedbank notified him in August 2018 that his accounts with the bank had been restricted and that he should provide the bank with information about the source of his wealth.
The funds in his bank account that were forfeited were not proceeds of any unlawful activities and were not deposited in the account in a manner that contravened Namibia’s foreign exchange regulations, Olenga said as well.
According to the BoN, though, Olenga’s investment account with Nedbank Namibia violated the Exchange Control Regulations, and this led to the decision to declare the money in the account forfeited to the state.
In her judgement, Prinsloo noted that the Supreme Court at the end of January this year made it clear that only the BoN’s board of directors and governor have the authority to block a bank account.
The BoN’s director of exchange control and legal services, who in August 2020 blocked Olenga’s account, did not have that authority, Prinsloo concluded.
For the same reasons, the BoN’s subsequent decision to forfeit the money in Olenga’s account to the state should also be set aside, Prinsloo said.
Declaring the central bank’s Foreign Currency Exchange Manual invalid would create a gap in the Namibian economy and have far-reaching consequences for the country, Prinsloo also said.
Noting that the BoN applies the manual as a law, Prinsloo said the manual should be published in the Government Gazette, and this “would instil and maintain investor confidence in Namibia as a sound investment option, while also encouraging transparency”.
Prinsloo also ordered the BoN to pay Olenga’s legal costs in the matter.
Lawyer Sisa Namandje, assisted by Matilda Jankie, represented Olenga.
Natasha Bassingthwaighte, assisted by Ndinelao Kamati, represented the BoN, and senior counsel Raymond Heathcote, Eva Shifotoka and Flora Gaes represented Nedbank Namibia.
