Zim shareholders turn to Supreme Court to stop SME Bank liquidation

Home National Zim shareholders turn to Supreme Court to stop SME Bank liquidation

Roland Routh

Windhoek-The minority shareholders in the Small and Medium Enterprises Bank (SME Bank) have instructed their lawyer, Sisa Namandje, to appeal the order of High Court Judge Hannelie Prinsloo to place wind up the SME Bank.
Namandje confirmed the instructions last week and said the notice of appeal was ready and that he was only waiting for the reasons of the judgment to be delivered before he launches an appeal before the Supreme Court.

The Namibian government owns 65 percent of SME Bank, while the Metropolitan Bank of Zimbabwe and World Eagle Properties, both from Zimbabwe, are minority shareholders with 30 and 5 percent, respectively.
The Namibian government has been supportive of the move by the Bank of Namibia that the bank be liquidated.

Last week Prinsloo ordered that the Metropolitan Bank of Zimbabwe and the company, Worldeagle Properties, which opposed the Bank of Namibia’s application to have the SME Bank closed down, pay the central bank’s legal costs in the matter.

According to Namandje, a notification to appeal has already been sent to the judge and the Bank of Namibia to inform them of his intentions to appeal to the highest court in Namibia for them not to proceed with the winding up of the SME Bank until the Supreme Court has pronounced itself on the matter.

Namandje said the judge must make her reasons known as soon as possible, as the matter was of national importance.
“It is wrong for the judge to make us wait for her reasons, as this is an important matter,” Namandje told New Era telephonically.

Judge Prinsloo granted the order for the final winding up of the SME Bank on Wednesday last week, but has not released her reasons as yet, saying on inquiry she still “needs to dot the i’s and cross the t’s.”
Judge Prinsloo gave the order on an application by the Bank of Namibia to have the SME Bank wound up. The closure of the bank – which needed recapitalisation of N$359 million to stay afloat – was a result of questionable investments of about N$200 million in little-known South African entities.

When the Bank of Namibia sought closure of SME Bank, the court was told the N$200 million was likely lost. Documents submitted to support the BoN’s winding up application show how SME Bank executives invested in highly questionable and illegal business ventures, which are neither allowed by the Namibian Banking Act, as some of the firm the money was deposited with were reportedly not approved investment entities.

Further, when the maturity date arrived for the N$200 million invested with South African institutions, the money did not yield a single cent. It was also revealed that some N$175 million was invested in fertilisers with a Lebanese company and channelled to accounts belonging to unknown beneficiaries, who had no investment contracts with SME Bank.

Most of the factual information regarding the more than N$200 million that SME Bank lost only came to the fore after the matter was referred to the Namibian police and the South African prosecuting authorities, who assisted in the investigations through that country’s International Cooperation in Criminal Matters Act.

With the matter now seemingly finalised in the High Court, the Supreme Court will hear the appeal in four to eight months, and thus SME Bank’s immediate future remains in limbo.

The judge had ordered that SME Bank be placed under a final winding-up order in the hands of the Master of the High Court of Namibia. She further ordered that the Metropolitan Bank of Zimbabwe and World Eagle Properties, who opposed the application, pay the costs of the plaintiff on the scale of one instructing and two instructed counsels.

The Bank of Namibia was represented by Advocate Andrew Corbett, assisted by Advocate Deon Obbes on instructions of Charles Visser, and the respondents by Advocate Anthony Bishop on instructions of Sisa Namandje.