Questions have been raised as to whether Secretary of Cabinet George Simataa misled investigators who were looking into the affairs of SME Bank or whether management fed him false information. Simataa who was the bank’s board chair before it was placed under curatorship has come under scrutiny for his involvement in the saga. The alleged dubious investments conducted under the nose of Simataa are proving to be a major embarrassment for government and have sullied its image as a government caught napping. Simataa may emerge clean but the political, transparency and accountability cost is already high for government which is struggling to win public trust.
In his arguments in the High Court this week before Judge Hanellie Prinsloo, senior counsel Andrew Corbett questioned why N$40 million that was due for repatriation in February from South Africa never arrived. This, despite the fact that Simataa had given assurance to the investigators that the money would be recouped. “My Lady, it is either he made a false statement under oath or incorrect information was presented to the board by management,” Corbett said. The seasoned lawyer was combative in his arguments and accused the bank’s management and board of failing to prudently handle investments and failing to carry out all due diligence procedures.
Court papers indicate that SME Bank gave assurance that it will return N$40 million from the investments at Mamepe/VBS Mutual Bank on 7 February 2017 to meet the requirements of BID-07. The papers further state that Simataa on 23 January 2017 “unequivocally stated in a letter addressed to BoN that the investment action is a contravention of the Act, SME bank undertakes to call back N$40 million from South African investments by 7 February 2017 to rectify such breach. The papers further stated: This did not happen. Later, Mr Simataa claimed in Court papers delivered in other review proceedings pending before court that indeed the N$40 million matured on 7 February 2017 but was rolled over to pave way for the unwinding of the entire portfolio on the basis of BoN’s insistence that the investment be recalled.”
“They kept making risky investments in the South African market without any oversight by the bodies created to do so,” said Corbett as he continued to argue why the bank should be liquidated. He was adamant that the decision to liquidate SME Bank would bolster the regulatory powers of the central bank while at the same time boosting confidence in the local banking system. “Money is not everything here, but we have to remain mindful that this is public money we are dealing with,” he said.
Corbett questioned: “On what basis would the minority shareholder say there is no public interest if the majority shareholder is for liquidation?”