12 Apr 2017 17:20pm
WINDHOEK, 12 APR (NAMPA) - The Namibian Government did not intervene to stop actions taken by the Bank of Namibia (BoN) when the authority dismissed the Small and Medium Enterprises (SME) Banks executive and directors last month.
President Hage Geingob said this Wednesday afternoon in his third State of the Nation Address during a joint session of the National Assembly and National Council.
He said it would be inappropriate for Government to comment.
While we cannot comment in detail on this matter because it is sub-judice, Government did not intervene to stop actions taken by the Bank of Namibia against the SME Bank, said Geingob.
A legal battle over the claim that the BoN acted unlawfully is underway in the High Court before Judge Shafimana Ueitele.
BoN removed the directors and the executives and took charge of the SME Bank following the discovery of what appears to be unsound investments of close to N.dollars 200 million, allegedly made in South Africa.
In the lawsuit, the disempowered directors and executives are requesting the court to issue an order that will set aside the BoNs decision and to reinstate them in their positions.
The applicants are also asking the court to review and set aside the central banks 24 February decision to take control of the SME Bank and to have that decision declared unlawful and invalid.
The applicants are SME Bank Chief Executive Officer, Tawanda Mumvuma; Finance Manager Joseph Banda; General Manager of Treasury and Investments, Alec Gore; Chairperson of the Board, George Simataa; Vice-Chairperson, Enock Kamushinda; and ordinary Director, Ozias Bvute.
Mumvuma alleges in an affidavit that the manner in which they were removed from office did not comply with the Banking Institutions Act in two key respects, and also because the SME Bank and those affected were not given a fair opportunity to be heard before the BoNs decision was enforced.
He said in terms of the Banking Institutions Act, the central bank does not have the power to remove the directors or officers of a bank by itself and can only instruct the financial institution to do so.
Government has over the past four years pumped N.dollars 477 million into the SME Bank, while the 2017/18 National Budget includes a proposed allocation of N.dollars 15 million for the bank.
Vincent Mareka is defending the applicants.
Deon Obbes is representing the respondents (BoN).