Ruling on SME Bank saga next week

19 Apr 2017 12:10pm
WINDHOEK, 19 APR (NAMPA) - The ruling over whether the court case of dismissed Small and Medium Enterprises (SME) Bank executives and directors fired by the central bank last month is urgent, will be handed down in the High Court next week.
The applicants claim the Bank of Namibia (BoN) acted unlawfully when it dismissed them, and want the courts to deal with the matter with urgency.
High Court Judge Shafimana Ueitele, who presided over the urgent legal challenge, on Wednesday said he will give an order in respect of the urgency of the matter on Tuesday.
At the start of the hearing on 07 April 2017, prominent South African defence lawyer, Advocate Vincent Mareka, who is representing the dismissed directors and executives, said the application was brought before court as an urgent matter because his clients have suffered irreparable reputational consequences, and their removal from their respective positions at the bank is grave in the sense that these people will no longer be able to occupy any other managerial position in Namibia.
The BoN removed the ex-directors and the executives and took charge of the SME Bank following the discovery of what appeared to be unsound investments of close to N.dollars 200 million allegedly made in South Africa.
According to Mareka, the dismissal and the removal of the directors and the executive was unfair and unlawful because it was effected without his clients being accorded any opportunity to be heard as per provisions and requirements of Namibia’s labour laws in respect of removal and dismissal.
Furthermore, Mareka said the removal has also some life-threatening consequences because his clients are no longer receiving income after their salaries and other benefits were cut off, arguing that the dismissal was issued and implemented without prior knowledge of the applicants.
Deon Obbes, who is representing BoN in the legal wrangle, said the central bank acted lawfully and in accordance with the provisions of the country's Banking Institutions Act.
In the lawsuit, the dismissed ex-directors and executives, in general, want the court to issue an order that will set aside the BoN’s decision to remove them and to reinstate them in their previous positions.
They also ask the court to review and set aside the Bank of Namibia's 24 February 2017 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 he and his colleagues were removed from office was unlawful because it did not comply with the Banking Institutions Act in two key respects, and also because the SME Bank and the affected managers and directors were not given a fair opportunity to be heard before BoN took the far-reaching decision to take control of the bank.
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.
Instead, the law only gives BoN the power to order a banking institution to remove directors or officers from their posts, Mumvuma said in the affidavit.
The law, furthermore, states that BoN can take action, like ordering a bank to remove directors, if the central bank is satisfied that the banking institution in question is insolvent, likely to become insolvent or conducting its business in contravention of the law or in a manner detrimental to its customers or the general public.
The Namibian government has over the past four years pumped N.dollars 477 million into the SME Bank.
The 2017/18 budget includes a proposed allocation of N.dollars 15 million for the bank.
(NAMPA)
SKE/ND/