Windhoek-Zimbabwean minority shareholders in SME Bank are not clear as to how they plan to rescue the SME Bank, having not presented any counter proposal, or counter application as to how the bank would operate if it survived the axe.
The judgment by Judge Hannelie Prinsloo yesterday had it that as matters stand the Metropolitan Bank of Zimbabwe (Metbank) and World Eagle Properties have not shown the court “how the confidence of the Namibian public can be restored in the [SME] bank” should the liquidation be halted.
According to Prinsloo, if one has regard to the factual circumstances of the bank - which did not change much since the granting of the provisional order - then it is clear the bald statements and allegations made by the respondents were untenable.
She said there did not appear to be any dispute of actual facts on the merits of the matter and the issues of technical non-compliance raised indeed appear to be a game of smoke and mirrors, which leaves her with no option than to order the final winding up of the SME Bank.
Metbank and World Eagle Properties, both minority shareholders in SME Bank with 30 and 5 percent shareholding, respectively, have been contesting the liquidation of the beleaguered bank since July.
The Namibian government, which owns 65 percent, has not opposed the liquidation order, after saying it was not willing to put up more capital to keep the ailing bank solvent.
The closure of SME Bank, which needed recapitalisation of N$359 million to stay afloat – was the result of questionable investments of about N$200 million in little-known South African entities.
On that score, the judge said one should not lose sight of the fact that the majority shareholder, the government, has indicated in no uncertain terms that no further monies will be invested into the failing SME Bank.
Prinsloo’s judgment was on the opposing application by Metbank and Worldeagle Properties, who opposed the Bank of Namibia’s application to close down the SME Bank after the court ordered several weeks ago that liquidation should proceed and that the two applicants pay the central bank’s legal costs in the matter.
On Friday, Metbank and Worldeagle Properties instructed their lawyer, Sisa Namandje, to appeal the order of Judge Prinsloo to wind up the bank.
Namandje confirmed the instructions last week, saying the notice of appeal was ready and that he was only waiting for the reasons of the judgment to be delivered before launching an appeal with the Supreme Court.
However, in her judgment read yesterday Prinsloo said: “It is astounding that the respondents deny that SME Bank is insolvent from a liquidity point of view, bearing in mind that on the date of the granting of the provisional order the liquidity rate of the bank dissipated to a meagre N$3,895,994.25 (as on 10 July 2017)”.
According to Prinsloo, the respondents had only paid lip service to the willingness to recapitalise SME Bank, which has since come to naught. “There is no indication as to how and when this will occur and what their willingness entails, she stated.
“It is clear from the facts before me that the substratum of SME Bank has disappeared and having considered all the relevant circumstances and having due regard to the principle of justice and equity of the competing interests of all concerned, I conclude that winding-up would be just and equitable,” the judge ruled in her 27-page judgment.
When the Bank of Namibia sought closure of SME Bank, the court was told the N$200 million was likely lost. Further, when the maturity date arrived for the N$200 million invested with South African institutions, the investment did not yield a single cent.
Documents submitted to support the BoN’s winding up application show how SME Bank executives invested in highly questionable and illegal business ventures that are not allowed under the Namibian Banking Act, as some of the firms the money was deposited with were reportedly not approved investment entities. New Era Reporter
2017-12-06 09:01:55 | 1 years ago