Early victory for BoN against SME Bank

07 Jul 2017 14:40pm
WINDHOEK, 07 JUL (NAMPA) - An attempt to delay the Bank of Namibia (BoN)’s legal action to have the loss-making Small and Medium Enterprises (SME) Bank closed down, failed in the High Court on Friday.
Representing the struggling SME Bank and its minority shareholders on Thursday, lawyer Sisa Namandje asked presiding High Court Judge Johanna Prinsloo not to entertain the BoN’s urgent application to liquidate the SME Bank.
In her ruling on this technical legal point on Friday morning, Prinsloo dismissed Namandje’s request and allowed the legal proceedings initiated by the BoN against the SME Bank to proceed as scheduled.
The dismissal of the request on the point of alleged non-compliance with provisions of Companies Act 28 of 2004, also culminated in an early victory for the BoN in its legal battle for the complete closure of the banking institution.
The court thus started listening to arguments in respect of the urgency of the BoN’s application and will determine during the course of next week whether this application has met all requirements for it to be heard on an urgent basis.
After a ruling on the urgency of the matter next week, the merits of the case will be heard.
The central bank initiated legal action against the SME Bank to prevent further financial losses.
The BoN in April disempowered six executives and directors of the SME Bank and took charge of it following the discovery of what appeared to be unsound investments of close to N.dollars 200 million, allegedly made in South Africa.
The six 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.
The Namibian government has over the past four years pumped about N.dollars 477 million into the SME Bank since its establishment in 2013.
The 2017/18 National Budget includes a proposed allocation of N.dollars 15 million but Finance Minister, Calle Schlettwein last month called for the complete closure of the SME Bank.
The applicant in the legal wrangle is BoN.
The respondents are SME Bank and its Zimbabwean shareholder - World Eagle.
Advocate Andrew Corbett is representing BoN.
Hearing continues Friday afternoon.