Search widens for Avid-SSC N$30 million

THE High Court yesterday beefed up the powers of the provisional liquidator put in charge of the affairs of three key figures in the N$30 million investment debacle involving the Social Security Commission, Avid Investment Corporation and Namangol Investments.

Provisional liquidator Eric Knouwds will now be able to widen the scope of his investigation of Avid and Namangol Investments’ financial affairs to South Africa – specifically the search for the N$30 million in supposed welfare money the SSC entrusted to Avid – in terms of one of two court orders that Judge Elton Hoff issued in the High Court. In terms of a second order, Knouwds received the same extended powers to investigate the financial affairs of Nico Josea, the Chief Executive Officer of Namangol Investments whose personal estate was provisionally sequestrated on Wednesday last week at the same time Namangol Investments was provisionally liquidated.Josea had been arrested the previous day on a charge of fraud, alternatively theft, as a direct result of information that emerged during a Companies Act enquiry in the High Court on the SSC’s N$30 million investment through Avid.Through Judge Hoff’s two orders Knouwds has been given permission to appoint PriceWaterhouseCoopers Business Recovery and Insolvency (PWC) as his agent to carry out a range of tasks that he says should assist him in investigating the companies’ and Josea’s financial affairs.The court authorised PWC to conduct a full forensic investigation and analysis of the financial affairs of Avid, Namangol and Josea, to apply for and carry out searches and seizures in terms of the Insolvency Act, to brief legal practitioners for the purpose of conducting interrogations in terms of the Companies and Insolvency Acts, and to assist in any interrogation or enquiry to gather information from the two companies or their directors, Josea and other possible witnesses.Furthermore, PWC was authorised to extend their investigation to South Africa as well.In this respect, the court ordered that PWC could apply for a recognition order in South Africa to interrogate witnesses and secure and recover assets of Avid, Namangol and Josea that might be located in South Africa.Judge Hoff also gave Knouwds permission to appoint a forensic information technology specialist to investigate the computers that were seized from the Windhoek office of Avid after the company was provisionally liquidated on July 12.A similar order for the appointment of IT specialists for that purpose was already granted by Acting Judge Raymond Heathcote during the Companies Act enquiry into Avid’s affairs last week.SSC legal counsel Andrew Corbett, who has been representing the SSC on the instructions of lawyer Patrick Kauta over the past three weeks, however told Judge Hoff yesterday that that court might not have been the competent court to give such an order while it was busy with a Companies Act enquiry.With no documents whatsoever found at Avid’s office after the company was placed under provisional liquidation, the computers that remained in the office might be the only remaining sources of information from Avid itself on the company’s finances and the millions that the SSC had entrusted to it.An affidavit by Knouwds was placed before the court to motivate the two applications.In it he once again related main points from the history of the SSC’s investment through Avid.The SSC placed an investment of N$30 million with Avid on January 26, Knouwds stated.It was to be invested for a four-month period.In Avid’s own version, N$31,479 million should have been repaid to the SSC no later than May 28.Despite various demands from the SSC, the money has not been returned.During the course of Acting Judge Heathcote’s enquiry into the investment, evidence was heard that N$29,5 million had been transferred from Avid’s bank account to a Namangol account on January 28, “Avid being unable to properly explain why it had appropriated N$500 000 of such funds,” Knouwds stated.After receiving the money from Avid, Namangol transferred N$20 million to an account of Allan Rosenberg Investment Bank, N$6,3 million was transferred to Dean Africa CC in South Africa, and “various large sums of money” were transferred from Namangol to the personal account of Josea, according to Knouwds.Various large amounts were also transferred to other entities, he added.On March 14, an amount of N$14,899 million was paid into Josea’s personal account.”This amount was dissipated by Josea by the payment of large sums of money to various entities and individuals, including Josea’s brother,” Knouwds related.He stated: “It is clear from the above that Avid has misappropriated public funds, and Namangol and Josea have similarly appropriated large portions of such funds and dissipated such funds, which funds include monies received from Avid for the purposes of placing an investment on behalf of the Social Security Commission,” Knouwds stated.”It makes sorry reading,” Corbett told the Judge.”It is our experience that Namangol and Mister Josea have dissipated more than 14 million within less than a month.These are the people we are dealing with,” he added when telling the Judge why Knouwds had approached the court on an urgent basis.In terms of a second order, Knouwds received the same extended powers to investigate the financial affairs of Nico Josea, the Chief Executive Officer of Namangol Investments whose personal estate was provisionally sequestrated on Wednesday last week at the same time Namangol Investments was provisionally liquidated.Josea had been arrested the previous day on a charge of fraud, alternatively theft, as a direct result of information that emerged during a Companies Act enquiry in the High Court on the SSC’s N$30 million investment through Avid.Through Judge Hoff’s two orders Knouwds has been given permission to appoint PriceWaterhouseCoopers Business Recovery and Insolvency (PWC) as his agent to carry out a range of tasks that he says should assist him in investigating the companies’ and Josea’s financial affairs.The court authorised PWC to conduct a full forensic investigation and analysis of the financial affairs of Avid, Namangol and Josea, to apply for and carry out searches and seizures in terms of the Insolvency Act, to brief legal practitioners for the purpose of conducting interrogations in terms of the Companies and Insolvency Acts, and to assist in any interrogation or enquiry to gather information from the two companies or their directors, Josea and other possible witnesses. Furthermore, PWC was authorised to extend their investigation to South Africa as well.In this respect, the court ordered that PWC could apply for a recognition order in South Africa to interrogate witnesses and secure and recover assets of Avid, Namangol and Josea that might be located in South Africa.Judge Hoff also gave Knouwds permission to appoint a forensic information technology specialist to investigate the computers that were seized from the Windhoek office of Avid after the company was provisionally liquidated on July 12.A similar order for the appointment of IT specialists for that purpose was already granted by Acting Judge Raymond Heathcote during the Companies Act enquiry into Avid’s affairs last week.SSC legal counsel Andrew Corbett, who has been representing the SSC on the instructions of lawyer Patrick Kauta over the past three weeks, however told Judge Hoff yesterday that that court might not have been the competent court to give such an order while it was busy with a Companies Act enquiry.With no documents whatsoever found at Avid’s office after the company was placed under provisional liquidation, the computers that remained in the office might be the only remaining sources of information from Avid itself on the company’s finances and the millions that the SSC had entrusted to it.An affidavit by Knouwds was placed before the court to motivate the two applications.In it he once again related main points from the history of the SSC’s investment through Avid.The SSC placed an investment of N$30 million with Avid on January 26, Knouwds stated.I
t was to be invested for a four-month period.In Avid’s own version, N$31,479 million should have been repaid to the SSC no later than May 28.Despite various demands from the SSC, the money has not been returned.During the course of Acting Judge Heathcote’s enquiry into the investment, evidence was heard that N$29,5 million had been transferred from Avid’s bank account to a Namangol account on January 28, “Avid being unable to properly explain why it had appropriated N$500 000 of such funds,” Knouwds stated.After receiving the money from Avid, Namangol transferred N$20 million to an account of Allan Rosenberg Investment Bank, N$6,3 million was transferred to Dean Africa CC in South Africa, and “various large sums of money” were transferred from Namangol to the personal account of Josea, according to Knouwds.Various large amounts were also transferred to other entities, he added.On March 14, an amount of N$14,899 million was paid into Josea’s personal account.”This amount was dissipated by Josea by the payment of large sums of money to various entities and individuals, including Josea’s brother,” Knouwds related.He stated: “It is clear from the above that Avid has misappropriated public funds, and Namangol and Josea have similarly appropriated large portions of such funds and dissipated such funds, which funds include monies received from Avid for the purposes of placing an investment on behalf of the Social Security Commission,” Knouwds stated.”It makes sorry reading,” Corbett told the Judge.”It is our experience that Namangol and Mister Josea have dissipated more than 14 million within less than a month.These are the people we are dealing with,” he added when telling the Judge why Knouwds had approached the court on an urgent basis.