Director Accused of N$1,4m Fraud

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By Kuvee Kangueehi Windhoek The Namibian High Court has granted a South African company, Automated Fuel Systems (AFS) the right to access the account of their former shareholder and director Esau Mbako, after the company made a claim that Mbako defrauded his former employers of more than N$1,4 million. In its application to the High Court, the Chief Financial Officer of the AFS Mark Culverwell states that he believes that a number of cheques totalling N$1 420 293 had been paid into the private account of Mbako at the First National Bank and the bank was not willing to make information available to AFS because of client confidentiality. The High Court has also instructed the First National Bank not to allow any payments to be made from the two bank accounts held by Mbako at the First National Bank. Mbako, former Corporate Affairs Manager at Air Namibia, holds two accounts at the bank, one of which is an exclusive banking suite. AFS deals in the fitting of Vehicle Identification Unit and had numerous contracts in Namibia, including with the Ministry of Transport to fit 3 000 such chips on government vehicles. Culverwell, who was represented by Peter Koep, said that he became concerned almost a month ago when he received a telephone call at his office in Cape Town from an account relationship manager. The manager informed him that Mbako had attempted to pay a cheque made out to AFS into his own personal account. He told the court that at that stage the relationship manager had already paid the cheque into the account of Mbako but had reversed that entry, subsequently paying the amount into the account of AFS. “These enquiries led me to believe that Mbako had defrauded AFS and he was paying into his own account cheques made out to AFS and due and payable by the Government Garage in respect of the sale of units by AFS to the Government Garage.” He further noted that during discussions held in Cape Town on March 13, Mbako admitted to have misappropriated funds, which he at the time estimated to be N$1,1 million and acknowledged that he was owing to the major shareholder of AFS. He said Mbako also did not have any authority to endorse the cheque and to pay it into his own account. Culverwell also noted that since he received the call from the bank relations manager, he together with directors and shareholders of the major shareholder in South Africa have been investigating the issues relating to the “fraudulent” activities of Mbako. “In the process we have held numerous discussions not only with Mbako but also with officials within the Ministry of Finance, our clients in Namibia, in order to establish the exposÃÆ’Æ‘Æ‘ÃÆ”šÃ‚© which AFS might or would have following from the fraudulent activities of Mbako.” The chief financial officer said during the investigations it also became apparent that Mbako had constructed fictitious invoices, purported to be invoices of AFS and had presented them to the Government Garage for payment. Culverwell also stated that Mbako while in Cape Town made a payment of N$200 000 in an attempt to persuade AFS not to pursue further action against him. In its application, AFS also unsuccessfully tried to attach the assets of Mbako. AFS was targeting the house of Mbako in Pionierspark, which is valued at N$1, 3 million, which would give an excess over the bonds registered of approximately N$500 000, and a property in Swakopmund which was bought for N$150 000 of which only N$50 000 was paid. However in his answering affidavit, Mbako refuted some of the allegations made against him. He noted that the amount of N$200 000 was paid in order to settle the outstanding amount with his former employer and to avoid being arrested as threatened by Culverwell. “I deny that I am indebted to AFS to an amount of N$1, 4 million as on AFS own version and the fictitious invoices.” The case has now been set for April 11, 2006 at the High Court. Senior Counsel Gerson Hinda is representing Mbako.