THE SME Bank on 24 March 2015 made a near crippling payment to a company that, at that point, had never before managed money on behalf of the public.
New information in court documents also shows that at that time the investment left the bank insolvent – its liabilities were over N$10 million more than its assets.
The company involved was little known Tulive Capital, an investment firm owned by quantity surveyor businessmen Iyaloo ya Nangolo and Stephanus Adriaan (Ian) Oosthuizen.
This alleged ‘fake investment’ was reported to the Namibian Police, but the claims were never investigated.
The two are prominent figures in the Namibian construction industry but also have interests in tourism, insurance and renewable energy.
Both Ya Nangolo and Oosthuizen did not respond to detailed questions on the matter.
The Issue has learned that the two were slapped with a court order to pay the SME Bank N$13 million on 14 August 2020, by way of a summary judgement.
This was to return the initial N$10 million invested in Tulive Capital plus interest. The order came after the investment firm and its owners failed to provide the courts with a satisfactory explanation of the transaction.
BACKDATED AGREEMENT
Investigations into the SME Bank and the way it was run uncovered a number of red flags regarding the Tulive Capital transaction.
It led to the liquidators dragging Tulive Capital, its owners and business associate Wiclif Bonny Damaseb, to court in a bid to recover the N$10 million it received in what the liquidators termed a questionable transaction.
The liquidators claimed in court documents that there was no agreement or documentation to show reasons for the money being paid to Tulive, on 24 March 2015, the day the money was transferred to Tulive’s bank account.
Further, no agreement to indicate what the loan transaction was for existed on the day the money was paid to Tulive.
The liquidators also attacked an agreement dated 23 March 2015, a day before the money was paid out, questioning its validity.
“The discretionary agreement was backdated,” the liquidators’ particulars of claim said. They added that the 23 March 2015 agreement empowered Tulive Capital with full discretionary powers and authorised them to do what was deemed necessary with the SME Bank funds.
As a result, Tulive Capital used the money for private purposes, including transferring money to the owners’ companies.
The agreement does not stipulate what type of investments the SME Bank authorised Tulive to invest in.
In any event, the agreement was never authorised by the SME Bank board of directors.
The liquidators also added that the agreement contravened the Banking Institutions Act as well as the Value Added Tax Act.
“No commercial bank will ordinarily or usually enter into such a wide, discretionary and far reaching investment agreements,” the liquidators noted.
The liquidators also accused Tulive of failing to disclose that the money the firm was trading with actually belonged to SME Bank.
The firm, which had never handled any public money for investments before the SME Bank engaged them, secured N$10 million from the bank to invest during March 2015.
The transaction was considered suspicious because Tulive Capital’s two key owners, Ya Nangolo and Oosthuizen, are primarily known for running their quantity surveying firm, Jordaan Oosthuizen Nangolo, and are not known to have a background in banking or investment management.
The liquidators found another red flag when they discovered the bank also paid for the two men’s travel expenses in early 2016. Court documents indicate that between January and February 2016, the two travelled to the United Kingdom and the United Arab Emirates.
The SME Bank bankrolled their flights and hotel accommodation on both trips.
They could also not explain why the bank paid for their trips.
However, The Issue understands that the two accompanied a delegation of SME Bank heavyweights, including runaway former deputy chairman and minority shareholder Enock Kamushinda, then CEO Twanada Mumvuma, and contested bank brand ambassador Tanya Hangula, on the UAE trip.
The trip was allegedly to discuss a possible partnership between the two quantity surveyors and the SME Bank to come up with a low cost housing initiative.
This led, in part, to the liquidators believing that the initial N$10 million investment was a result of collusion between the bank’s management and Tulive Capital’s owners.
RAW INTELLIGENCE
Interestingly, the Tulive Capital deal was reported to the police in late 2015. A whistleblower wrote an anonymous letter to the police commercial crimes investigations division in October 2015.
The letter made a wide range of allegations, including what it termed “fake investments” made by the bank with an entity called Tulive Capital.
“An amount of N$10 million was transferred to Tulive Capital on the pretext of an investment, a South African Company. No board approval either and under suspicious circumstances. The money is at risk in the Avid type of circumstances and more funds may have followed. The same culprits are at it again,” read the part about the Tulive Capital transaction.
At the time, the police did little to no groundwork to determine the validity of the claims or allegations made in the anonymous letter.
The Issue reported that the police head of the anti-money laundering investigations unit, 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.
The Tulive Capital allegations were one of many made in the anonymous letter, which have now turned out to be true.
In March, Sandema told The Issue that the police could not launch an investigation because the information in the letter was considered raw intelligence. “With that intelligence, it was difficult to get an investigation going since the information contained in the letter was thin,” he was quoted as saying.
In the picture from left: Iyaloo ya Nangolo & Stephanus Adriaan (Ian)
