When Business and Intellectual Property Authority (Bipa) boss Vivienne Katjiuongua learned about conspiracies to commit fraud at the entity, she moved a sensitive document to her office for safekeeping. 

However,  this did not stop alleged devoted internal fraudsters from executing their unlawful mission.

In the end, a founding statement of a close corporation (CC2) was amended without necessary members’ consent. 

Katjiuongua’s decision to annul amendments, which she deemed unprocedural, however, has since been set aside by the High Court. 

It is a decision the Authority has appealed at the Supreme Court. 

In September last year, the High Court ordered that the Bipa CEO’s initial decision to cancel the registered CC2 documents be set aside and declared as unlawful, as she had no legislative powers to cancel the CC2 and was, therefore, functus officio. 

The CC2 documents were registered as if no cancellation had taken place.

“On 30 September 2022, Mr Gideon Smith (the third respondent in the High Court judgment), filed a notice of appeal to the Supreme Court against the High Court judgment for an order for the registered CC2 documents to be declared as null and void,” Bipa’s spokesperson Ockert Jansen said on Tuesday upon inquiry. 

Bipa also filed a cross-appeal in the Supreme Court on 28 October 2022 due to the similarity of relief sought from Smith in the matter.

“Bipa has filed its contentions as of 13 March 2023 and awaits feedback on the hearing date set for the matter to be heard in the Supreme Court. We understand that matters are backlogged in the Supreme Court – and as such, no date has been given for the matter to be heard,” he said.  

Lies and deceit 

The fraud and deceit involved a two-legged process. The first was side-stepping established procedures at Bipa, relating to the amendment of founding statements of close corporations (CCs).

This was allegedly done by persons acting on behalf of Orange River Exploration CC, where entrepreneur Gideon Smith owned 85% of the joint venture, while that of businessman Peter Shifwaku was 15%.

At the end of the alleged crime, Orange River Exploration Mining CC found itself wholly owned by Shifwaku, leaving Smith with nothing. 

The transfer was done in a fraudulent manner. 

Now owning 100% of the business, following the ousting of Smith, Shifwaku allegedly sold Orange River Exploration CC to controversial lithium mining company in Uis, Xinfeng Investment (PTY) Ltd. 

Alongside Xinfeng, Likulano January, Yujing Li and Yiming Xie are also cited as applicants in the matter concluded in the High Court late last year.

Con 

“In order to transfer the 100% member’s interest in Orange River Exploration Mining to the applicant, the 8th respondent (Shifwaku) required the written consent (signature) of the 3rd (Gideon Smith).

“This was never obtained. Instead, the 3rd respondent’s signature was fraudulently copied and pasted on the CC2 (amended founding statement) to signify the 3rd respondent’s ‘consent’ to transfer his member’s interest to the applicants,” Bipa stated in court documents.

In the matter, Bipa accuses Shifwaku of falsifying documents linked to the N$50 million sale of Orange River Exploration. 

Shifwaku and others were reportedly paid N$38 million in the process, Bipa asserts. 

The first payment was N$16 million on the date of the signature of the agreement. 

A further N$16 million was paid on the transfer date, while the last N$16 million was transferred on the closing date. 

Bipa has since suspended two officials identified in facilitating the fraud. 

Gatekeeper  

What is, however, peculiar is, when information was whispered in Katjiuongua’s ear that her internal team was conspiring with outsiders to amend the founding statements, she acted swiftly.

“To avoid any irregularity, the 1st respondent (Katjiuongua) responded and requested that the original file be brought to her office for safekeeping,” reads a section of the trove of court documents that were reviewed by this paper. 

It continues: “The reason for requesting the original file was that, before an amendment to the founding statement could be processed, the original file had to [be] requested. This would ensure that the 1st respondent herself [Katjiuongua] could ensure that there was no irregularity with regard to the amendment of the founding statement”. 

However, according to insiders, this was not enough to stop the amendments from taking place under Katjiuongua’s nose. 

To circumvent the safeguard implemented by Katjiuongua, officials at Bipa connived with individuals purportedly representing Orange River Exploration and Mining to create a temporary file.

“Creating a temporary file was highly irregular and flouted the standard operating procedures at Bipa. A temporary file can only be created when the original file is lost or cannot be found after a diligent search. This was of course not the case,” Bipa stated in its argument. 

At the authority, the record department was aware that the original file was in Katjiuongua’s safe hands. 

The department was also aware that attempts by dark forces would be made to amend the founding statement. 

However, on 6 July 2022, Katjiuongua received information from Bipa chairperson Immanuel !Hanabeb, that the Orange River Mining Exploration CC’s founding statement had been amended. 

Katjiuongua was baffled, “as the original file had not been requested from her in order for the amendment to be processed”.

However, investigations by Katjiuongua revealed that standard operating procedures were sidestepped. 

“Investigations also revealed that the signature of the 3rd respondent [Smith] had been fraudulently pasted onto the CC2 document. The fact that the 3rd respondent had not signed the document was confirmed by the 3rd respondent’s legal practitioner in a letter, dated 7 July 2022,” Bipa further stated.

As such, on 8 July 2022, Katjiuongua cancelled the amended founding statement. 

She justified her decision: “It has come to our attention that fraudulent amendments were made to the list of members in the entity, Orange River Exploration and Mining, with the registration number CC/2020/01708”. 

“The said amendments were made on 30 June 2022 and were facilitated without the proper consent of all members of the entity. After a proper assessment by the Business and Intellectual Property Authority, it is evident that all members of the entity were not involved in the amendment process,” Katjiuongua explained. 

She continued: “As a consequence, the amendments made are null and void, and the entity maintains its status, specifically the members’ interest (Gideon Benjamin Smith 85% and Peter Shifwaku 15%), which is now restored as last amended and registered on 16 May 2022”.

Counter-offensive 

However, four days later, lawyers representing Xinfeng Investment (PTY) Ltd, Likulano January, Yujing Li and Yiming Xie wrote to Katjiuongua, protesting her decision. 

They argued that Katjiuongua was functus officio [of no further official authority or legal effect] to take the decision. 

“That Article 18 had been breached as the applicants had not been given the opportunity to make representations as to why their property should not be taken away and third that only a court could cancel the amended founding statement,” the lawyers argued. 

What is strange, however, is allegations of fraud against Orange River Exploration Mining CC and Shifwaku were not answered by the applicants. 

“No explanation is given to answer the serious allegations against the 8th respondent (Shifwaku) and his company that they committed fraud… the applicants have not distanced themselves from the fraud committed by the 7th and 8th respondents. The failure to deal with the allegations of fraud constitutes as admission by silence on the part of the 7th (Orange River) and 8th (Shifwaku) respondents,” Bipa charges. 

Above board

Shifwaku was quoted by a local daily this week as denying any wrongdoing in the saga. 

According to The Namibian, he is also demanding payment of N$9 million from Hineni Investments (PTY) Ltd. 

“The 85% member’s interest that was transferred to him (Smith) was for the security of payment, and no payment has been made to date. So, there is no valid reason as to why Smith still holds these interests in my company. It is not for the purpose of theft,” Shifwaku was quoted earlier this week. 

- emumbuu@nepc.com.na