Monograph 108 complete download - Institute for Security Studies

Namibia
21
An Investments Committee set up within the SSC was not authorised by the
Board. Only a select membership of the Board was privy to its existence and
operations and those members in the know were probably some of the persons
who were benefitting from the activities that were going on or were associated
with the perpetrators.
Internal auditing structures were poor. There was lack of clarity as to whom the
Auditing Unit reported to. If it reported to the Chief Executive Officer then it
was almost inevitable that any improprieties found by it would not be brought
to the attention of the Board. On the other hand, if it had an obligation to
report to the Board directly, the risk existed that nothing would be done to
force a powerful executive to take remedial action. Furthermore, if there was
collusion between certain members of the Board and some of the management
executives, no action could be expected to be taken to correct the situation. It
would have been preferable for the audit function to reside in an independent
committee that reported directly to the responsible minister, i.e. the Minister
of Labour.
There were patently ineffective checks and balances built into the structures of
the SSC. This facilitated the perpetration of the predicate fraudulent activities
that generated the commissions and kickbacks that were subsequently
laundered by the beneficiaries. From this it can be seen how crime—and for
present purposes, especially money laundering—can be facilitated by the failure
to put in place proper management structures, the hiring and appointment of
unsuitable personnel and poor corporate governance. This situation can arise
in any sphere of the financial and commercial sectors.
After the commissions had been generated, the beneficiaries were able to
launder the money owing to a variety of factors and circumstances which
operated in their favour. The first and most important factor is the absence of
anti-money laundering legislation. The second is the absence of suitable anticorruption
provisions in the existing law. It is possible that some of the activities
of the persons concerned can be prosecuted under the provisions of the current
Anti-Corruption Ordinance. However, some of the activities that probably took
place, such as the abuse of inside information, cannot be dealt with as such
under the criminal law as it stands.
It is possible that some of the persons involved saw nothing wrong in what they
were doing. For example, the Managing Director of Channel Life, Lennie Louw,