SSC funds used to buy diamonds, court hears

OLD habits die hard, even if those habits take the form of diamond-dealing and if millions of dollars belonging to the Social Security Commission have to be used to keep those habits going, indicates evidence heard on Thursday.

During the High Court’s inquiry into the SSC’s investment of N$30 million with the now provisionally liquidated Avid Investment Corporation, it was heard that N$2,6 million that is suspected to have originally been part of the money that the SSC intended to invest with Avid for a four-month period in late January, ended up being used by Nico Josea, Chief Executive Officer of the likewise provisionally liquidated Namangol Investments, to buy diamonds. Josea, who continued to give evidence before Acting Judge Raymond Heathcote on Thursday, said three payments, totalling N$2,6 million, that Namangol Investments made to a company in South Africa, Fask Trading, between February 11 and April 14, were all part of a deal in which he bought diamonds from that company.He got some 4 000 carats of diamonds, which he claimed had been worth around US$800 000 (about N$5,2 million), for the N$2,6 million, collected the stones in Johannesburg, and flew first to the Democratic Republic of Congo and then on to Zurich in Switzerland, where he planned to sell the stones, Josea told the court.He did not manage to sell the diamonds, though, because the potential buyers were not happy with the size and quality of the stones, so he returned with the diamonds to Johannesburg, and handed them back to Fask Trading, Josea claimed.Josea made a point of stressing that this transaction had been entirely legal and above board.However, he told the court of the diamond transaction only after he had been asked directly about it.As SSC lawyer Andrew Corbett questioned Josea in greater detail about the gem deal, an obvious explanation for Josea’s apparent reluctance to discuss diamond dealing matters soon emerged.He has a history in that field dating back to the time before Namibia’s Independence, it transpired, and he did not particularly like being asked about this part of his past.Josea and Corbett got caught in an angry exchange as Corbett started to press Josea for answers on his past.Each time that Corbett asked him whether he had previously worked for the former Consolidated Diamond Mines (CDM), whether he had ever been arrested for illegal diamond dealing, and whether he had ever been convicted of illegal diamond dealing, Josea replied vehemently, his anger visibly rising: “That was before Independence!” Back on the subject of his dealings with Fask Trading, he told the court that after he had returned the parcel of diamonds with which he had travelled to Zurich, he decided to buy a mining dredge in the DRC.He and a group of partners – he said they were ten “brothers” from the same church that he belongs to – put down some US$840 000 (about N$5,47 million) on that deal, of which N$2,6 million was Namangol Investments’ contribution, Josea claimed.As he continued with his evidence, it emerged that the dredge purchase had not actually been executed in full yet, with Josea claiming that he was supposed to return to the DRC this month to finalise the transaction.He had actually only seen a photograph of the dredge up to now, he added.It also emerged that there were claims that Josea’s business associate in Fask Trading, Serge Kabeya’mwana, had told the Avid provisional liquidator’s representatives in South Africa that Josea owed him US$800 000, and that he had laid a criminal charge against Josea in South Africa.It was claimed that the diamonds that Josea had taken to Zurich had been swapped and replaced with worthless stones before they were returned to Fask Trading in Johannesburg, Corbett told Josea.”That’s the first time I hear about that,” Josea replied.With a parcel of diamonds, or perhaps a mining dredge deep inside the DRC in the area of Tshikapa having emerged as the latest possible assets that the Avid liquidator may want to get hold of in his efforts to pay the company’s debts, Josea revealed that he had one more undeclared asset: a Swiss bank account.He did not volunteer that information out of his own either, but only confirmed that he had a bank account in Switzerland when Corbett asked him directly if he had an account there.Josea, who continued to give evidence before Acting Judge Raymond Heathcote on Thursday, said three payments, totalling N$2,6 million, that Namangol Investments made to a company in South Africa, Fask Trading, between February 11 and April 14, were all part of a deal in which he bought diamonds from that company.He got some 4 000 carats of diamonds, which he claimed had been worth around US$800 000 (about N$5,2 million), for the N$2,6 million, collected the stones in Johannesburg, and flew first to the Democratic Republic of Congo and then on to Zurich in Switzerland, where he planned to sell the stones, Josea told the court. He did not manage to sell the diamonds, though, because the potential buyers were not happy with the size and quality of the stones, so he returned with the diamonds to Johannesburg, and handed them back to Fask Trading, Josea claimed. Josea made a point of stressing that this transaction had been entirely legal and above board.However, he told the court of the diamond transaction only after he had been asked directly about it.As SSC lawyer Andrew Corbett questioned Josea in greater detail about the gem deal, an obvious explanation for Josea’s apparent reluctance to discuss diamond dealing matters soon emerged.He has a history in that field dating back to the time before Namibia’s Independence, it transpired, and he did not particularly like being asked about this part of his past.Josea and Corbett got caught in an angry exchange as Corbett started to press Josea for answers on his past.Each time that Corbett asked him whether he had previously worked for the former Consolidated Diamond Mines (CDM), whether he had ever been arrested for illegal diamond dealing, and whether he had ever been convicted of illegal diamond dealing, Josea replied vehemently, his anger visibly rising: “That was before Independence!” Back on the subject of his dealings with Fask Trading, he told the court that after he had returned the parcel of diamonds with which he had travelled to Zurich, he decided to buy a mining dredge in the DRC.He and a group of partners – he said they were ten “brothers” from the same church that he belongs to – put down some US$840 000 (about N$5,47 million) on that deal, of which N$2,6 million was Namangol Investments’ contribution, Josea claimed.As he continued with his evidence, it emerged that the dredge purchase had not actually been executed in full yet, with Josea claiming that he was supposed to return to the DRC this month to finalise the transaction.He had actually only seen a photograph of the dredge up to now, he added.It also emerged that there were claims that Josea’s business associate in Fask Trading, Serge Kabeya’mwana, had told the Avid provisional liquidator’s representatives in South Africa that Josea owed him US$800 000, and that he had laid a criminal charge against Josea in South Africa.It was claimed that the diamonds that Josea had taken to Zurich had been swapped and replaced with worthless stones before they were returned to Fask Trading in Johannesburg, Corbett told Josea.”That’s the first time I hear about that,” Josea replied.With a parcel of diamonds, or perhaps a mining dredge deep inside the DRC in the area of Tshikapa having emerged as the latest possible assets that the Avid liquidator may want to get hold of in his efforts to pay the company’s debts, Josea revealed that he had one more undeclared asset: a Swiss bank account.He did not volunteer that information out of his own either, but only confirmed that he had a bank account in Switzerland when Corbett asked him directly if he had an account there.