Momentum/Swabou Transfer Opposed

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By Catherine Sasman WINDHOEK Hendrik Christian has lodged an opposing affidavit in the High Court arguing against the intention of South African-based Momentum Group Limited to transfer its long-term insurance business to Swabou Life Assurance Company Ltd. In terms of a notice of the transfer, Momentum will transfer the “insurance business” conducted by it to Swabou Life in relation to Namibian policyholders underwritten by Momentum. The company sent a notice of its intention on May 10, 2007, stating that Swabou Life would then be responsible “for the fulfillment of all the obligations of Momentum insofar as the said obligations relate to the insurance business”. Parties opposed to the transfer were given a 21-day period to submit to either the South African or Namibian registrar of long-term insurance their concerns. The last day for this was Monday, July 9. Momentum and Swabou Life intend to apply to the High Court on Friday for the confirmation of the proposed transfer. An earlier decision by the South African Pension Fund Adjudicator was that Momentum would undertake to transfer funds held in the South African Self-Financed Retirement Annuity Fund back to the Namibian Southern Life Namibia fund. The fact that the Southern Life Namibia fund does not exist anymore, caused a big conundrum over where the money is to be transferred. Christian claims in his affidavit that the Self-Financed Retirement Annuity Fund is not a party to the agreement between Momentum and Swabou Life, arguing that the latter fund is a pension fund organisation and not an insurance business. He noted that the long-term insurance business does not include activities of pension fund organisations. He submitted that the assets of the Namibian Self-Financed Retirement Annuity fund “can only be repatriated to itself and not to Swabou”. “The notice of the transfer of insurance policies sent to the members clearly concealed the presence of pension fund organisation business,” he charged, adding that Momentum further “concealed” the fact that it is using trust monies to “buy preferential shares for itself at the expense of the fund and its members”. He also claimed that the funds have not been repatriated as claimed by Momentum, but in fact are still in the possession of the Momentum Fund. Advocate Lucius Murorua last week requested urgent intervention in the matter relating to the transfer from Minister of Finance Saara Kuugongelwa-Amadhila. “[This] matter has far-reaching pension fund governance implications and is about transfer of pension fund assets without the consent or assent of the fund members and/or the Registrar of Pension Funds who is also the Registrar of long- and short-term insurance,” Murorua wrote to the minister. He expressed concern that the proposed transfer may be in violation of the country’s provisions of the Financial Institutions (Investment of Funds) Act of 1984.