By Catherine Sasman
WINDHOEK
A six-year-long court battle between retirement annuity fund Momentum Group Limited and Hendrik Christian of Hope Financial Services is set to go before the Supreme Court today.
Christian, the first appellant in a notice to the court and is appealing a previous decision in favour of Momentum and the Namibia Financial Institutions Supervisory Authority (Namfisa).
A High Court judge dismissed the case on two technical points in March last year.
In his notice, he argues that the Momentum Group Limited, which underwrites the Self-Financed Annuity Fund, has failed to transfer Namibian pension money held “illegally” in South Africa, despite a judgment by the Pension Funds Adjudicator (which has concurrent jurisdiction with the High Court) in that country to have the money transferred to the now-defunct Southern Life Namibia Fund.
He insists that the court upholds offences of “illegal transfer and taxation” of the pension money in terms of Namibia’s Pension Funds Act and the Income Tax Act. He further urges the Namibia Financial Institutions Supervisory Authority (Namfisa) to take action against all malpractices.
Namfisa, bemoans Christian, has abdicated its statutory obligations as a supervisory authority in this matter.
“Namfisa is selectively enforcing the country’s laws,” criticised Christian before appearing in the court. “If one compares Namfisa’s action against a Namibian short-term insurance company [BEE company Inscon, that was placed under provisional curatorship last Wednesday for failing to comply with statutory solvency levels. The company fell short by N$3,697 million], then it appears that it does not act when big companies are transgressing the laws.”
In his filing notice, Christian argues that Momentum has, so far, transferred funds valued at N$116 million, or close to N$200 million, to South Africa. In addition, he states, the group has collected about N$6,7 million per annum over a period of roughly 20 years.
Moreover, he argues that Namibian pension fund holders with the Momentum Group, had been paying tax in South Africa illegally. By 2001the total membership of the Self-Financed Retirement Annuity Fund was 5 000, of which 1 000 retired. “From these retirees, 500 paid [taxes] to South Africa Revenue Services, N$40 000 each, total losses suffered by Namibia N$20 000 000 plus the rest paid less tax, this amount is likely to increase,” he continues to argue.
“[Namibians] are subjected to unfavourable tax deductions and Namibia is robbed of revenue income, meaning if Government suffered such losses in income tax, there will be shortfalls to finance national budget, and all Namibians will suffer, including [the Registrar of Pension Funds and Namfisa],” he states.
The purported illegal transfers, he continues, was realised through a “fictitious”, unregistered – in both Namibia and South Africa – and hence illegal Master Adaptor Retirement Annuity Fund allegedly created by Momentum.
The Self-Finance Retirement Annuity Fund, claims Christian, is a “front” for the Master Adaptor Retirement Annuity Fund.
In a letter to Christian in December 2005, Namfisa concurred that the Master Adaptor Retirement Annuity Fund is not registered in either two countries. It further acknowledged that prior to 1998, “annuities were sold to Namibian individuals under the name of the said fund”, and that “premiums are however collected in Namibia”.
“If the Master Adaptor Fund is not registered, yet is collecting premiums, this may well constitute an illegality in terms of the Pension Funds Act and the Income Tax Act, among others,” granted Namfisa.
At that time, Namfisa undertook to take the matter up with relevant ministries of the two countries, the revenue authorities, as well as the regulatory authorities “to find a solution that would be in the best interest of the members of the fund”.
Christian, however, maintains that nothing has since been done to stop the outflow of Namibian moneys, or the return thereof.
Christian has until yesterday not been able to secure legal representation in this very complex and convoluted matter before the court.