BoN scores second victory against SME Bank

10 Jul 2017 16:40pm
WINDHOEK, 10 JUL (NAMPA) - The Bank of Namibia (BoN) on Monday scored a second victory in its legal action against the Small and Medium Enterprises (SME) Bank when the High Court ruled that its application for the closure of the loss-making bank is of urgent nature.
In her ruling in respect of the urgency on the matter on Monday afternoon, High Court Judge Hannellie Johanna Prinsloo said the BoN’s application met all the legal requirements in accordance with the Companies Act 28 of 2004 to be heard on an urgent basis.
The judge further said the decision by BoN Governor Ipumbu Shiimi was right when he stepped in with the legal action against the SME Bank to minimise the financial losses at the struggling banking institution.
Sisa Namandje, appearing for the SME Bank and its minority shareholders, unsuccessfully wanted the application not to be heard on an urgent basis and thereafter be struck off the High Court’s roll.
While the about 208 employees at the troubled bank have sleepless nights over their future, Advocate Andrew Corbett, who is representing BoN in the legal battle, strongly argued that the Government is fully aware that the closing of the SME Bank is in the best interest of the country’s financial sector and nation.
After a ruling on the urgency of the matter, the court then started listening to the merits of the case.
On Friday last week, an attempt by Namandje to delay the legal proceedings also failed when the court dismissed his request on a technical point and thereafter allowed the hearing to proceed as scheduled.
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.
Hearing of the merits of the case continues for the rest of the week.