High Court Judge Shafimana Ueitele yesterday struck from the roll the urgent application by SME Bank executives, and board members, who were summarily removed from their posts in March by the Bank of Namibia.
Ueitele dismissed as not urgent the application by the former SME Bank executives and directors, who had asked the court to set aside on an urgent basis the Bank of Namibia’s decision and have them reinstated in their positions.
“The application to have the matter heard as one of urgency is hereby refused and the matter is struck off the roll,” Judge Ueitele ordered yesterday.
The judge found that the basis on which the applicants approached the court – that the actions of the Bank of Namibia to remove them from their posts in the manner it did has far-reaching effects and that they are bound to suffer irreparable damages – “was not reason enough in the eyes of the court to have the matter heard on an urgent basis.”
The former executives, including the “disempoered” SME Bank CEO Tawanda Mumvuna, and minority shareholder Enock Kamushinda, as well as Ozias Bvute and the chairperson of the bank’s board of directors and secretary to Cabinet, George Simataa, were the lead applicants.
They argued that the Bank of Namibia did not follow the lawful procedures to remove them from office and asked the court to urgently suspend the order by the Bank of Namibia and reinstate them to their former positions in the executive, as well as on the board.
On March 1, Governor of Bank of Namibia Iipumbu Shiimi announced the decision to relieve the SME Bank’s board of directors from their duties, including Mumvuma, the general manager for treasury, and the finance manager.
This came after the central bank launched an investigation into what it termed “questionable investments” amounting to nearly N$200 million that SME Bank made with South African institutions.
In its submission to the courts the Bank of Namibia raised doubts about whether the money will ever be recovered and cast doubt on the competence and fitness of the executives and board members to execute their fudiciary duties, should they be allowed to remain in their positions.
New Era earlier reported how the nearly N$200 million that the SME Bank Namibia invested with two little-known South African entities was emptied out of these companies’ bank accounts less than two months after the deposits were made from Namibia.
SME Bank funds flowed into a troubled bank, called Venda Building Society (VBS) Mutual Bank, as well as into a cash management firm, called Mamepe Capital – both South African entities.
There were major disinvestments (withdrawals in layman’s terms) immediately after the money was deposited with the two institutions and very little interest was earned on the amounts deposited.
Nevertheless Simataa, Kamushinda, Mumvuna, Bvute and two others approached the High Court as matter of urgency, praying for their reinstatement to their former positions with immediate effect and until such time their case has been finalised in the courts.
Ueitele told the court yesterday that the application to have the matter heard as one of urgency has been refused and the matter has been struck off the roll, which means the former directors will not be reinstated as they had hoped.
The court further ordered that the six ex-directors of SME Bank jointly and severally pay the legal fees of the eight respondents.
Their case will now fall into the queue of cases going procedurally through the High Court on a non-urgent schedule.