POLICE did not open a money laundering investigation or a case for over a year after first receiving an anonymous tip to look into theft, fraud, maladministration, and money laundering at the now-defunct SME Bank.
They blame their lack of action on raw intelligence and a lack of information, while pinning their hope on help from the Financial Intelligence Centre, which never came.
The anonymous tip arrived by way of a letter dropped off at the police commercial crimes investigations division during October 2015. Despite the information in the letter being compelling, a formal case was only registered in November 2016 by then Bank of Namibia head of banking supervision, Romeo Nel.
The situation is further complicated by the fact that the then head of the police anti-money laundering unit received an SME Bank business loan during the same period the police were supposed to be investigating the theft and money laundering allegations levelled against the failed bank.
Deputy commissioner Rector Sandema received a N$350 000 loan, through his company Shower Investments, from the SME Bank while investigating the bank for alleged money laundering. Sandema, however, told The Issue that the two events were not related and were rather an unfortunate coincidence.
“We lacked information to launch an investigation into this case,” said Sandema, who confirmed that he started looking into the anonymous letter but that he only considered the information in the letter as mere intelligence.
He added that he was somehow prohibited by protocol to register a case and open a docket without the inspector general of the Namibian Police’s permission.
“With that intelligence, it was difficult to get an investigation going since the information contained in the letter was thin,” he said. The information, according to Sandema, did not give him enough to be able to convince the then police chief, Sebastian Ndeitunga, to permit him to start a full investigation. Investigations into money laundering cases require the police chief’s approval before they are formally registered.
He said he then used certain sections of the Prevention of Organised Crime Act (Poca) to request information from the SME Bank. He said the information was thin and considered just intelligence, meaning it needed further corroboration and verification. Sandema added that the fact that the anonymous tip had no name or contact details made it difficult to pursue the case.
He nonetheless managed to get permission to request information from the SME Bank and put the allegations to its management.
The letter stated, among other things, that the bank lost N$4 million in a bogus Mastercard deal with its Zimbabwean shareholder, Metropolitan Bank of Zimbabwe (MetBank). It said that despite the bank having paid to be connected to the Mastercard system two years prior, nothing was done, and SME Bank clients at that point could still not use their cards for transactions outside of the bank’s ATM facilities. A year before the anonymous letter landed on Sandema’s desk, The Namibian published the same allegations in an article titled ‘Bank Pays N$4 million for Non-Working Payment Systems’ in October 2014. The article stated that the money was paid to MetBank in February of that year, and by October, nothing had come of the investment.
The letter further alleged that during May 2015, an amount of N$10 million was transferred out of the bank to a South African entity without the SME Bank board approving such a transfer or investment. It also stated that N$1 million was written off as “treasury losses” but that the board was kept in the dark about the said decision.

Rector Sandema
Sandema said he then sent questions to SME Bank CEO Tawanda Mumvuma, who simply played down the allegations, saying that ‘it is just our enemies who want SME Bank to fail’. “
I also thought this intelligence would be followed by an FIC report, considering the money was in large sums,” Sandema said. The senior officer concedes that he never took the matter up with the FIC. He said, considering the magnitude of the allegations, he was hoping that it was just a matter of time before the FIC would send his office a report on the said transactions. A report from the FIC would have automatically resulted in a case being registered.
Sandema said he was not a part of the investigation team when a case was eventually registered. He was also transferred to the office of the regional crime investigations coordinator in March 2017.
The Loan
Sandema said that after receiving Mumvuma’s response, the case went cold around March 2016. He then pursued an opportunity to get a loan with the bank he was supposed to be investigating.
“I have always been owning a shebeen and selling foodstuffs,” said Sandema about his business acumen. He said he needed to grow his business and decided to formalise it. That is why he registered Shower Investments in October 2015.
He then started the loan application process around April 2016, and it was eventually approved. His house was used as collateral. On 21 June 2016, Sandema’s Shower Investments opened an SME Bank account.
Two months later, on 17 August 2016, his company received a N$350 000 loan from the bank. In 2017, the SME Bank came knocking, and Sandema and his wife were forced to take out a loan with another commercial bank to settle the SME Bank loan.
In August 2020, Sandema decided to declare his business interest with his employers and applied for permission to do remunerative work outside of the civil service. Permission was granted by both police chief Joseph Shikong and home affairs minister Albert Kawana in 2022. Shikong did not respond to questions about whether police investigated Sandema’s potential conflict of interest in the matter.
This article was produced in partnership with Integrity Namibia.