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26 July 2010

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WINDHOEK – The Government will not institute any investigation against the seemingly squandered money of the Government Institutions Pension Fund (GIPF) and will allow relevant statutory bodies to look into the matter in which about N$600 million of public servants’ pension investments were written off as bad debts.

Both Prime Minister Nahas Angula and Finance Minister, Saara Kuugongelwa-Amadhila, indicated over the weekend that Government would not act, unless advised to do so by the Namibia Financial Institutions Supervisory Authority (Namfisa), which has been investigating the GIPF.

Namfisa has been investigating the manner in which N$660 million of pensioners’ investments was disbursed as loans through the defunct Development Capital Portfolio (DCP) scheme of the GIPF, a lion’s share of which was written off as bad debt.

It is believed that about N$600 million was written off as bad debt after recipients of the funds, mainly a small group of well-off local businessmen, failed to pay back the money to the GIPF, which would have accrued a return of about N$950 million, including interest.

Angula described the matter as “not a good story to tell”, and said “some people took advantage of a well-intended initiative”, but said Government would leave it all to Namfisa.

“We have a regulator, a statutory agency acting on Government’s behalf. They have to advise Go-vernment on what to do about their findings,” the Premier said.

Described as the country’s biggest financial scandal ever, the DCP loans only made a paltry return of N$380 million after 21 companies received the combined N$660 million.

Several companies were liquidated, while some appeared to be briefcase entities that did not have any assets that the GIPF could have attached as guarantee for any defaults.

“This is by far the biggest financial scandal, much bigger than ODC, Avid, Prowealth or SSC,” a financial expert privy to the details of the matter told New Era over the weekend.

“If one would account for the investment return achieved each year, the loss to members of the fund would have been N$2.3 billion in 2008,” the source added.

Kuugongelwa-Amadhila said although Namfisa has carried out an “inspection audit” at the GIPF, the full report was not availed to her.

“There was never a report brought to me suggesting there was corruption at the GIPF,” she said.

The Finance Minister described Namfisa as an “autonomous” body, adding that the supervisory authority’s investigation of the GIPF was a decision that it took itself.

The pronouncement by the two senior Cabinet members comes hot on the heels of high public expectation that someone would be held accountable for the loss of the money.

New Era gathered over the weekend that the ‘executive summary’ and recommendations by Namfisa on the GIPF investigation was handed over to Government in November 2007, with the full report handed over to the Anti-Corruption Commission (ACC) in early 2008.

The fact that Namfisa has made submissions to the ACC suggests that the supervisory authority detected what, in its opinion, could constitute corruption of some sort.

Last week, the Director of the Anti-Corruption Commission said his agency would not investigate this case because most of the transactions took place before the ACC was constituted.

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