SONJA SMITH and SHINOVENE IMMANUELLIQUIDATORS are suing to recover money from six former SME Bank board members, including secretary to the Cabinet George Simataa, minister of home affairs, immigration, safety and security Frans Kapofi, and Namibia Institute of Public Administration and Management (Nipam) boss Andrew Ndishishi.
The others are the Social Security Commission’s chief executive officer, Milka Mungunda, Namibia’s commercial counsellor to the Unite States, Petrina Nakale, and businessman Justus Hausiku.
Liquidators said the six former SME Bank board directors were reckless and allowed Zimbabwean national Enock Kamushinda free rein to steal N$247 million from the bank.
“They [the directors] failed generally to act honestly and in good faith, or in the best interest, or for the benefit of the SME Bank and its depositors and therefore recklessly failed in the performance of their functions as directors of the SME Bank,” the liquidators said.
The liquidators have filed a case in the Windhoek High Court against the bank’s directors as part of an ongoing legal process that began in August 2020.
This was after High Court acting judge Collins Parker found that N$247 million was indeed ‘stolen’ from the partly government-owned bank.
The liquidators – Ian Mclaren and David Bruni of Investment Trust Company – were appointed in July 2017 to shut down the bank.
The liquidators are also going after some former board members to pay back a total of N$1,7 million in board fees, and want them to pay for the commission of inquiry and legal costs, and for any debt or liabilities of the SME Bank.
Board members sued to repay the money include Mungunda (N$478 330), Nakale (N$436 000), Kapofi (N$331 000), Simataa (N$203 570), Ndishishi (N$198 000) and Hausiku (N$111 000).
The liquidators claim the former board members were not entitled to any remuneration from the bank because shareholders never approved it.
As directors of the bank [SME], the defendants were not entitled to remuneration for being directors, and by the fact of being appointed as directors.
“The defendants would only become entitled to remuneration once an agreement was reached between them and the bank, and once there was compliance with the bank’s board charter [which was approved on 16 December 2016],” court papers read.
The liquidators also claim there is no contract between the bank and the former board members.
“Despite the fact that no contract existed between the SME Bank and the defendants for any remuneration to be paid to any of the defendants, the amounts were paid to the respective defendants,” they argued.
The payments made to Ndishishi and Hausiku were made on 1 March 2013.
According to court documents seen by , Nakale’s payment was made in 32 transactions between 1 March 2013 and 23 November 2015, while Mungunda’s payment was made in 46 transactions between 1 March 2013 and 3 March 2017.
Kapofi’s payment was made in 25 transactions between 1 March 2013 and 27 April 2015, while Simataa’s payment was made in 17 transactions between 7 October 2015 and 3 March 2017.
The liquidators provided several reasons in their court papers as to why the directors should be held liable personally.
“The fact that the incumbent director defendants accepted their appointment as directors of the commercial bank, knowing that they did not have the required knowledge or skills to serve on a board of directors of a banking institution, and knowing that if they would deserve to be on the board of the SME Bank in such circumstances, the business of the Bank could or might be carried on recklessly,” court documents said.
The liquidators said the directors – upon their appointment– recklessly failed to acquaint themselves with the history of the SME Bank such as board minutes and previous communications between the bank and the Bank of Namibia.
“The reckless manner in which the incumbent director defendants permitted Kamushinda, (Tawanda) Mumvuma, Ozias Bvute and the others to have free rein to perpetuate the fraud and theft ..,” the court papers read.
The directors were also accused of recklessly permitting the SME Bank’s business to be carried out without obtaining an anti-money-laundering system in place.
“The reckless manner in which the incumbent director defendants failed to ensure that the Board Audit Risk Committee recommendations to combat fraud and money laundering were not read, or if read, not implemented.”
The liquidators said the directors “acted recklessly and with knowledge of the fundamental defects in the SME Bank’s systems”.
“That it be declared that the defendants are jointly and severally liable to the plaintiffs, without any limitations, for all/any of the debts or other liabilities of the SME Bank,” the liquidators demanded.
SSC boss Mungunda yesterday said she has not seen the court papers yet.
“That money was for board fees. That is the only thing I could think of right now. But I will check the case and see how I will approach it,” she said.
