NAMIBIAN authorities say they are “meticulously examining” documents relating to the looting of the Small and Medium Enterprises (SME) Bank of about N$247 million (about US$15 million) to determine whether any criminal activities and Zimbabwean businessman Enoch Kamushinda (pictured) contributed to the bank’s collapse in 2017.
NATHAN GUMA
The country’s courts have said Kamushinda and his Zimbabwean accomplices should be extradited to Namibia for prosecution for looting the now defunct bank dry into a shell and eventual closure.
This comes as the Supreme Court of Namibia says Kamushinda and his local cronies “systematically looted” the now defunct SME Bank of about N$247 million (about US$15 million), in a new judgment which nails the Metropolitan Bank (MetBank) boss, with far-reaching consequences for him and others.
In a Supreme Court appeal, heard on 1 March 2024 in Windhoek by three judges — Sylvester Mainga, David Smuts and Theo Frank — before judgment was delivered on 13 March 2024, the justices said Kamushinda brazenly plundered the bank and fled to South Africa.
The judges said Kamushinda’s pillaging of the bank constituted criminal liability.
The court recommended his prosecution, raising the prospect of extradition and asset forfeiture.
Namibian Prosecutor-General Martha Imalwa says her team is closely studying the case to see if Kamushinda and those he acted in cahoots with should be arraigned.
Supreme Court judge Dave Smuts two weeks ago directed the court’s registrar to provide a set of documents the bank’s liquidators filed in the High Court to Imalwa.
Imalwa told The Namibian newspaper said her office would analyse the documents alongside the case file.
“A criminal case has to be proven beyond reasonable doubt. It’s a heavy burden we have as prosecutors, but it’s in my hands now,” Imalwa told The Namibian.
In those documents, the liquidators set out in detail the results of an investigation they carried out into the industrial-scale plunder of SME Bank.
The Supreme Court has ruled in favour of SME Bank’s liquidators, allowing them to pursue legal action against key figures in the bank’s collapse.
The judgment came after a High Court ruling in 2020 which made similar findings.
The Namibian government, through the company Namibia Financing Trust, owned 65% of the shareholding in the SME Bank, while MetBank was a 30% shareholder and World Eagle Investments — Kamushinda’s entity — had a 5% stake.
Kamushinda, former board chairperson of the bank; Tawanda Mumvuma, ex-finance manager; Chiedza Goromonzi, employed in the bank’s finance department; Joseph Banda and others were accomplices.
The bank is now under liquidation.
SME Bank’s joint provisional liquidators, Ian McLaren and David Bruni, said Kamushinda and colleagues were involved in coordinated theft, fraud and money laundering which resulted in the bank losing N$247 million in an intense four-year looting spree, from December 2013 to January 2017.
The liquidators also said Kamushinda, through his companies Crown Finance Corporation and Heritage Investment Holdings, of which he is the sole director, and his accomplices acted in connivance in the grand looting scheme.
Court papers say Zimbabwean expatriates were recipients and distributors of proceeds from unlawful activities as defined in Namibia’s Financial Intelligence Act.
McLaren and Bruni said they were involved in the creation and execution of false payment instructions at SME Bank from December 2013 to January 2017.
However, in their first response Kamushinda, his two companies, Mumvuma and Goromonzi initially raised exceptions to the claim, which they described as “vague and embarrassing”.
After the bank was put on provisional liquidation on 11 July 2017, MetBank, World Eagle and Kamushinda, World Eagle chair and SME Bank director in his personal capacity, brought an application on appeal against the liquidators and Bank of Namibia (BoN) for an order declaring that the closure of the SME Bank was in violation of their constitutional rights and a nullity. The application was opposed by the liquidators and BoN.
The liquidators then brought a counter-application against the appellants — which the appellants opposed — to rectify SME Bank members’ register and for MetBank and World Eagle to make outstanding payments for their shareholding; and for Kamushinda to be declared liable for bank liabilities under section 430 of the Companies Act 28 of 2004.
They also demanded that MetBank and World Eagle be declared liable for the liabilities of the SME Bank at the date of liquidation; and for judgment against the appellants jointly and severally for the following amounts: (i) N$1 028 286 903,13; (ii) N$60 million; (iii) interest on these amounts at the legal rate from 12 July 2017 to date of payment; and costs.
The appellants later withdrew their application and opposed the liquidators’ counter-application. Appellants raised preliminary points of prescription and non-joinder.
The High Court proceeded to hear the counter-application and granted judgment as sought against the appellants on 29 October 2020, save for the relief sought against the appellants jointly and severally for the amount of N$60 million which was abandoned.
Notice of appeal against the judgment of 29 October 2020 and the record of appeal were filed timeously, on 26 November 2020 and on 28 January 2021 respectively.
The bond of security was however only filed some months later on 31 May 2021, not in compliance with rule 14 of the Rules of the Supreme Court.
Appellants brought an application for condonation for this non-compliance and reinstatement of the appeal only on 21 January 2022. The matter was initially set down for hearing on 27 March 2023.
After the matter was set down for its initial hearing on 27 March 2023, the appellants’ erstwhile legal practitioner sought a postponement through a letter to the respondent’s legal practitioners and to the registrar of the court on 13 March 2023.
The respondents declined this request and on 17 March 2023, the appellants’ then legal representative filed a notice of withdrawal.
The respondent’s representatives pointed out that the said notice failed to comply with the peremptory requirements of rule 3A of the rules of the court.
On the day of the hearing, a new legal practitioner representing the appellants appeared before court and submitted that she had not had the opportunity to consult with her clients and that she was not in a position to argue the application for condonation and reinstatement and asked for a postponement of the matter to enable her to bring a formal application for deferral.
This request was denied and the matter was struck from the roll with costs.
