“It is irrational to preserve or eventually forfeit millions of ‘clean’ money because of tainted, perceived or real money that was mixed with untainted millions. This amounts to punishment”.
This was the verdict of the full bench of judges of the High Court on Friday before declaring part of the definition of “proceeds of unlawful activities”, whose phrases “… includes property which is mingled with a property that is proceeds of unlawful activity”, unconstitutional. The definition is contained in section one of the Prevention of Organised Crime Act 29 of 2004 (POCA).
The full bench, which comprised judges Tomas Masuku, Herman Oosthuizen and Hannelie Prinsloo, were in agreement that the definition of proceeds of unlawful activities as contained in POCA does not comply with Article 22 of the Constitution. “The impugned part of the definition of proceeds of unlawful activities is arbitrary and deprives owners of lawfully-acquired property of their rights to that property without providing sufficient reasons,” said the judges.
The court’s order is a result of a constitutional suit filed in October 2020 by Martin Shilengudwa and his wife, Hilma Shilengudwa. The Shilengudwas’ challenge of the law comes after a preservation order was granted against their accounts when they subsequently sold a property to the Business and Intellectual Property Authority (Bipa) for N$18 million in 2017.
The property is located on a piece of land measuring 1 214 square metres situated on Shire Street in Wanaheda, Katutura, and was being used by the couple as a restaurant, bar, gambling house, event facility and car wash. The sale of the property became controversial as it was sold for N$18 million, which is significantly above its value of N$4.6 million.
Due to that, the government took the couple and BIPA’s former CEO Tileinge Andima to court, claiming a refund of N$18 million; the cancellation of the deed of sale and sale transaction; as well as a refund of N$2 million in transfer fees.
At the time, Andima was also suspended as CEO. In their suit, the couple argued that the wide definition of “proceeds of unlawful activity” has a crippling effect on properties lawfully attained. However, prosecutor general Martha Imalwa argued the preservation order was needed as there was reason to believe that the couple’s money was attained through unlawful means.
She said there was reason to believe that fraud was committed when four property evaluators concluded that the property’s value was between N$4 million and N$4.8 million, and not the value it was sold for. Furthermore, Andima apparently failed to follow procedures as set out in the Public Procurement Act when he purchased the property from the couple.
– mamakali@nepc.com.na