SME Bank makes first repayment to SSC

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Desie Heita

Windhoek-SME Bank yesterday paid N$30 million over to the Social Security Commission (SSC) as part of the investment agreement involving the N$150 million invested by the commission at the embattled bank.

New Era understands the N$30 million is the first instalment due to SSC as part of the multi-million dollar investments the company made at the bank.

The first portion of the investment was set for maturity on June 13, and SME Bank has promptly paid the money – and documents availed to New Era confirms SME Bank communicated as such in writing to SSC.

SSC is tasked to administer the provision of social safety nets for employees in the country such as work injury benefits, maternity and death benefits.

The payment comes as the acting SME Bank chief executive officer and the interim board fight to restore what is left of the bank’s reputation, following the discovery of questionable investments in little-known South African entities.

The bank, a joint venture between the Namibian government and private investors from Zimbabwe, also raised eyebrows when it came to light it advanced loans to big local companies such as Woermann Brock, while it is mandated to help small and medium enterprises.

The Bank of Namibia appointed the new acting CEO and interim board as fiduciaries after having found that the former executives and board could not properly account for depositors’ money invested with the bank.

Acting CEO Benestus Herunga would not comment on whether the repayments of investments to corporates, as scheduled, were a result of turnaround efforts by the interim executive team and interim board.

“We would not divulge clients’ information,” was all Herunga said before referring the posed question to the bank’s spokesperson, who was out of office.

SSC CEO Milka Mungunda yesterday said she would only comment at a later stage.
According to documents, SME Bank is again scheduled to pay SSC after 90 days in September, followed by another payment in November and the final payment in December.

The Bank of Namibia appointed Herunga after invoking Section 56 of the Banking Institutions Act last week and took control of the SME Bank’s assets, liabilities and all its business affairs.

The central bank took over the control of SME Bank after the bank failed to properly account for nearly N$200 million that SME Bank took from its clients and invested with other institutions in South Africa.

An auditors’ note by a South African auditing firm would later reveal a web of dodgy transactions, deposits and withdrawals, immediately after the SME Bank had invested the money with South African institutions.

SSC is not the only state-owned entity that invested its money with the SME Bank. Bank of Namibia in court papers listed the Government Institutions Pension Fund (GIPF), the Road Fund Administration (RFA), Agribank, NamWater and the National Energy Fund (NEF) as some of the state-owned entities that have invested with SME Bank.

The Bank of Namibia has told the court that the executive members, who challenged the Bank of Namibia for removing them from office may actually not be fit to manage the affairs of the bank. If the court rules in favour of the central bank, those officials may also not work for any other bank in the country.

Therefore, the bank said, the reason it replaced the executive and board of SME Bank is because it believed the bank is “conducting its business in contravention of the Banking Institutions Act, as amended, and in a manner detrimental to its customers or the general public.”

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