DTA’s Smit rips into SME Bank debacle

DTA’s Smit rips into SME Bank debacle OGONE TLHAGE

DTA secretary for finance Nico Smit says the suspension of the SME Bank’s board, CEO and two other managers because of dubious investments brought back memories of the lost Offshore Development Company millions.

“Inasmuch as the Bank of Namibia must be commended for taking decisive action and firing the offending executives and disbanding the board of directors, there must also be an honest recognition that the situation at the SME Bank has been allowed to spiral out of control whilst government, as the primary shareholder, stood idly by and continued to pump the taxpayer’s money into a failing enterprise,” said Smit.

“The use of the phrase ‘unsound investments’, as used in media reports to refer to dubious investments of close to N$200 million made by the SME Bank, conjures up unpleasant memories of the Offshore Development Corporation (ODC) and Social Security Commission (SSC) scandals where millions of taxpayer dollars were misappropriated.”

Not expecting much to happen, Smit expects the incident to be swept under the rug.

“It is anticipated that, as usual, there will be a lot of hot air thrown about and strongly worded statements declaring that ‘investigations will be launched’ and ‘investigation committees will be appointed’, however, what is truly important is that the findings of such investigations should result in tangible action and that the appropriate people are held directly accountable for their actions.

“It is not enough to merely suspend or remove someone from a position, but accountability needs to go further and result in either the return of the money that was dubiously invested, criminal charges of fraud being brought against the culprits, or both if need be.

“Failing this, given the involvement of politically connected individuals such as the current secretary to cabinet and the former secretary to cabinet and now the minister of presidential affairs, will only serve to further entrench the widely held belief that the well-connected are not held to the same standards of ethics and accountability as ordinary Namibians,” he said.

The Bank of Namibia last week placed the SME Bank under curatorship and temporarily axed its chief executive officer, manager for finance, manager for treasury and the board of directors.

It revealed that the commercial bank, majority owned by the Namibian government, had made “questionable” investments in South African financial instruments to the tune of almost N$200 million.

Bank of Namibia governor Ipumbu Shiimi said: “The Bank of Namibia’s considered view is that such investments have the potential to cause instability if they are verified to be unsound.

“The Bank of Namibia has assumed control of the operations of the SME Bank to allow for an objective and thorough assessment of the investment portfolio of the SME Bank to make a full determination of the soundness of these investments.”