Trustco rocked by fraud

A TRUSTCO senior manager and supervisor have been arrested and sacked after the company discovered a fraud scam allegedly involving the two.

The Namibian understands that the NSX-listed company has lost more than N$1 million as a result of the scam. Trustco is also listed on the Johannesburg Stock Exchange’s Africa Board.The company is now busy tightening its systems. It is contemplating unorthodox disciplinary action to hold the entire staff responsible for the fraud committed by some individuals. Trustco Managing Director Quinton van Rooyen says he is also considering withholding Christmas bonuses from all staff. The Namibian was informed by a number of staff members that he had told them in no uncertain terms that they would not get bonuses this year.In addition, annual salary increases and profit-sharing benefits have also been suspended, The Namibian was reliably informed.The majority of senior Trustco managers – nine out of 17 – have also lost the use of their BMW company cars. The Namibian understands that the nine were ordered to park their BMWs in the company’s basement on Monday.This action is believed to have led to the resignation of two senior managers this week.Poor performance and senior managers not meeting their deadlines was cited as the reason for the harsh measure. Sources said apart from managers failing to come up with individual draft policies on how to curb fraud in the company, Van Rooyen was infuriated by some senior managers who failed to attend management meetings.The mood in the company is said to have been very glum after Van Rooyen’s announcement of the sanctions.The following are Van Rooyen’s responses to questions e-mailed by The Namibian to him.The Namibian: We have heard that Trustco has uncovered a scam that fleeced the company of around N$1 million. Could you confirm?QvR: N$500 000, it happened over a 10-month period.The Namibian: Have you laid a criminal charge and has anyone been arrested?QvR: Yes, a senior manager, Maria Garises (six years employed by the group and winner of several performance awards) and a supervisor, Fransina Hidileko, (five years in the employment of the Group, a former employee of the year (2007) and winner of N$25 000 prize as a result) were arrested and released on bail.The Namibian: Was this an inside job only and how many people were involved?QvR: Yes, with outside assistance from bank employees. About 25 non-Trustco employees were involved. There is evidence that other employees were aware of the scam but did not report it….The Namibian: What financial effect, if any, has the scam had on the company?QvR: A direct loss of about a half a million Namibia dollars together with indirect losses in time spent on investigations, disciplinary actions, replacement of staff, re-training of staff, re-appointment of staff, updating of action plans, direct recruitment costs… all that are non-wealth-creating activities.The Namibian: As a result of the financial loss, we believe the company has taken a decision not to give bonuses to its employees this year. Can you confirm?QvR: The company is contemplating that. A proposal would be presented to the Board to suspend the payment of bonuses if senior executives do not have an implementable action plan ready by October 31 2009 to curb instances of dishonesty, fraud and theft.The Namibian: Do you think it is fair for all employees to pay for a few people’s greed?QvR: Yes. I am an absolute believer in collective responsibility, be it the responsibility to share in losses or the privilege to share in the wealth created.The Namibian: We understand that you have also taken action against some of your senior managers for poor work performance and have withdrawn their luxury company vehicles. Can you confirm?QvR: Some senior executives have lost the benefit to use company vehicles for private purposes because of internal company deadlines not being met.The Namibian: How many managers are affected by this measure and have you withdrawn this benefit permanently from them?QvR: Nine out of 17. The ban is effective up to January 31 2010.tileni@namibian.com.na