Africa-Press – Namibia. FORMER Small and Medium Enterprises Bank board chairperson Andrew Ndishishi has failed with an attempt to get out of a lawsuit in which he and other directors of the failed bank are being sued by the bank’s liquidators.
In a ruling delivered in the Windhoek High Court this week, judge Hannelie Prinsloo dismissed an exception which Ndishishi raised against legal action which the liquidators of the SME Bank are taking against him and five fellow Namibian ex-directors of the bank.
The liquidators, David Bruni and Ian McLaren, are asking the High Court to declare that the six former directors are liable for all the debts or other liabilities of the SME Bank, and that they should pay back all director’s fees they received while serving on the bank’s board of directors.
Bruni and McLaren are suing Ndishishi, the minister of defence, Frans Kapofi, the secretary to the Cabinet, George Simataa, and fellow former SME Bank directors Milka Mungunda, Petrina Nakale and Justus Hausiku. Ndishishi, Kapofi and Simataa each served as board chairperson of the bank.
Ndishishi was a director of the bank from March 2011, when the bank was registered, to October 2012, Kapofi from October 2012 to the end of April 2015, and Simataa from September 2015 to the end of February 2017.
Mungunda was a director from October 2012 to the end of February 2017, Nakale from March 2011 to November 2015, and Hausiku from March 2011 to October 2012.
In their claim against the former directors, Bruni and McLaren are alleging that the business of the SME Bank was carried on recklessly and that this enabled a group of Zimbabwean citizens who were involved with the bank to defraud the bank of at least N$247,5 million. They are also alleging that the bank’s directors knew the SME Bank’s business was conducted recklessly.
Bruni and McLaren are claiming that Zimbabwean businessman Enock Kamushinda, the SME Bank’s former chief executive officer, Tawanda Mumvuma, the bank’s former finance manager, Joseph Banda, a former assistant finance manager of the bank, Simbarashe Magombedze, and Kamushinda’s personal assistant, Chiedza Goromonzi, were involved in the theft of more than N$247,5 million from the bank.
Kamushinda served as deputy chairperson and also as chairperson of the SME Bank’s board of directors from October 2011 until the Bank of Namibia took over the management of the bank at the start of March 2017. His company World Eagle Investments was a minority shareholder in the bank, of which the Namibian government was the majority shareholder.
The two liquidators are alleging that large-scale theft was perpetrated at the bank – for which they blame Kamushinda, Mumvuma, Banda, Magombedze and Goromonzi – and that this took place because of recklessness on the part of the directors, who they say failed in their duties as directors.
According to Bruni and McLaren, the “fraudulent and reckless” manner in which the SME Bank’s business was conducted would not have happened if the directors did not accept their appointment to the bank’s board, while knowing they did not have the required knowledge or skills to serve as directors of a banking institution.
They further claim the directors allowed Kamushinda, Mumvuma and others to have free rein in the running of the bank, which enabled them to perpetrate fraud and theft, and allowed themselves as directors “to become mere rubber stamps for actions and decisions” taken by Kamushinda, Mumvuma and another Zimbabwean director of the bank, Ozias Bvute.
Bruni and McLaren are also claiming that the SME Bank never had a general meeting at which directors’ remuneration was approved. Without such approval having been granted at a general meeting, the bank’s former directors should pay back the fees they received as directors, the liquidators say.
They are claiming N$198 000 from Ndishishi, N$331 000 from Kapofi, N$203 570 from Simataa, N$478 330 from Mungunda, N$436 000 from Nakale, and N$111 000 from Hausiku.
In the exception he raised, Ndishishi said the claim against him was “vague and embarrassing” as it did not show in what way he failed to carry out his obligations as director of the bank or how the bank’s board was reduced to mere rubber stamps.
In addition, he said, he was no longer a director of the bank at the time when money was allegedly stolen from it. The case has been postponed to 24 March for a further status hearing to take place.
For More News And Analysis About Namibia Follow Africa-Press
