By Obrein Simasiku
WINDHOEK – The Namibia Financial Institutions Supervisory Authority (Namfisa) has cleared the controversy over the rejection of the Namibia Procurement Fund (Nampro)’s application to be registered as a Special Purpose Vehicle (SPV), stressing the application did not comply with its provisions.
Namfisa was specific, saying the applicant did not meet the requirements of sub-regulation 29 (11) of the Pension Funds Act that regulates such applications.
The controversy is based on that Nampro Fund operates primarily with close corporations (CCs) instead of more firmly regulated proprietary companies, thus raising risk concerns when dealing with pension funds.
Namfisa’s Chief Executive Officer, Phillip Shiimi, confirmed Nampro Fund’s application was received and reviewed and turned down for the reason that the application did not comply with the provision of sub-regulation 29 (11) of the Pension Funds Act, adding, “we advised them to consider issues raised by Namfisa for the purpose of resubmitting the application”.
Among other reasons was that CCs are not required to have external auditors, which raises greater risk because pension money will be exposed than when you are dealing with proprietary companies (PTY), as they are strictly regulated.
Shiimi added that the exposure of the envisaged SPV (Nampro) to CCs was among the reasons the application was turned down. “In terms of Regulation 29, SPVs’ investments disregard exposure to CCs,” he added.
Furthermore, he said Namfisa is empowered to register and supervise SPVs in accordance with Regulation 29 of the Pension Funds Act No. 24 of 1956.
This regulation does not empower Namfisa to exempt any entity from complying with the provisions contained within.
Shiimi encouraged participants in the financial sector to channel their objections against the registrar’s decisions through the Namfisa Board of Appeal, as provided for in the Namfisa Act No. 3 of 2001.
The Managing Director for Business Financial Solutions at Nampro, Kaunapaua Ndilula, confirmed their shortcomings, saying they submitted an appeal report in December 2014, which contains the reasons why the risk factor cannot be considered to be the sole reason not to be recognised as an SPV.
“We are looking forward to the response before June 2015, as it will be the deadline for (new) pension institutions to register,” said Ndilula.
She argued that Namfisa is not taking into account the fact that Nampro Fund, through the CCs, is striving to help small and medium enterprises in which it is succeeding with no hardships.