The Southern Times

The Southern Times Friday 07 - 13 December 2018
7
How VBS scheme broke
Namibian bank
■ NEWS
■ Dewald van Rensburg
While VBS Mutual Bank
was looted, a similar
small-scale bank in
Namibia was suffering the same fate
– allegedly with the help of VBS staff
and a business associate of its chief
executive, Andile Ramavhunga.
At least five different cases involving
Namibia’s SME Bank are now
before the Johannesburg High Court.
These cases are being heard while
a commission of inquiry sits in Sandton,
as the ruined bank’s liquidators
try to track down as much as R380
million of its money that went missing
in South Africa.
Their investigation so far has
uncovered a bizarre scheme involving
South African, Namibian and
Zimbabwean businesspeople; a
cash delivery company in Benoni
that allegedly handles R500 million
a month; a supermarket chain; and
an oil company in the Democratic
Republic of Congo.
The SME Bank case may be the
first controversy related to fraud
allegedly perpetrated by officials at
VBS involving Ramavhunga’s childhood
friend and business associate,
Mauwane Kotane.
SME Bank’s liquidators allege
Kotane played a major role in the
matter and is now fighting to avoid
testifying.
SME Bank’s investigations in
South Africa have led to the freezing
of R53 million in two companies’
bank accounts.
Of that, R11.5 million belongs to
Kotane, who City Press reported earlier
this year provided Ramavhunga
with a second income of millions of
rands while he ran VBS.
Ramavhunga earned “consulting”
fees from Kotane’s company Mamepe
Capital and simultaneously sent VBS
business Kotane’s way, according to
the transcript of Ramavhunga’s interrogation
by South African investigators
earlier this year.
Importantly, he signed off on a
deal for VBS to be the South African
banker in Kotane’s dealings with
SME Bank.
The other R41.5 million that SME
Bank’s liquidators have frozen
in South Africa belongs to Benoni-based
Asset Management Financial
Services (AMFS), which the
liquidators claim in court papers
helped launder money for the ultimate
mastermind allegedly behind
SME Bank’s collapse – Zimbabwean
banker Enoch Kamushinda, a minority
shareholder in SME Bank.
Kamushinda and Kotane are now
waging legal campaigns to stop SME
Bank’s liquidators from pursuing
their investigation with a barrage of
litigation in Windhoek and Johannesburg.
But it all began with a deposit at
VBS.
Cash Hole
SME Bank went into provisional
liquidation in June last year after its
auditor BDO flagged a massive hole
in its books that appeared as early as
August 2016 – long before the local
VBS bank fraud came to light.
It was an amount of R185 million
allegedly invested in VBS for which
the evidence was “not persuasive”.
This was an investment Kotane
allegedly managed for SME Bank.
It is unclear whether this investment
existed as there are wildly conflicting
account statements received
from VBS, SME bosses and Kotane
himself.
A VBS account statement provided
to SME’s auditors in late 2016
reflected a balance of R185.3 million,
which was supposedly invested with
Kotane’s company Mamepe, with
VBS providing an “escrow account”,
court papers say.
In January last year, VBS provided
another account statement, this time
directly to SME, reflecting a balance
of R154 million after R37 million was
paid back to SME.
In the same month, SME Bank’s
CEO and finance manager deposed
affidavits saying there was R154 million
at VBS and another R27 million
at Mamepe.
But another VBS account statement
given to the Bank of Namibia,
the country’s central bank, in March
last year reflected a balance of zero
– showing that there had not once
been more than R10 million in the
account.
One set of VBS bank records shows
that R60 million of SME Bank’s
money was transferred into VBS’s
own corporate account.
The statements were “unreliable,
highly questionable and suspicious”,
said Bank of Namibia Governor
Ipumbu Shiimi in an affidavit
at the time.
The conflicting versions kept piling
up.
In an affidavit in June last year,
Ramavhunga said Mamepe opened
an “escrow account” at VBS for SME
Bank, which was meant to receive
R185 million, but he added that SME
Bank’s VBS accounts only received
R60 million.
Of this, an undisputed R37 million
went back to SME Bank, while
R20 million went to Mamepe and
R10 million to Peregrine Equities,
which turned out to be a payment
to Kotane as well.
The next day, Kotane deposed an
affidavit telling a completely different
story, saying he was being subjected
to a baseless “fishing expedition”.
“The funds are held and invested
safely by my organisation, as per
our mandate. The funds are safely
invested with us and with maturity
dates that are not far into the future,”
he said.
Kotane provided a term sheet,
showing that R188 million in investments
he made for SME Bank would
mature and be repaid during last
year.
The money had been paid to a
number of SME Bank’s nominee
accounts, he said.
Most of the money was, he said,
invested in fertiliser for speculative
trading. A consignment note he produced
was, however, denounced as
fake by the Bank of Namibia.
The money was not repaid by the
supposed maturity dates and SME
Bank was liquidated. Its liquidators
have been fighting an array of court
battles ever since.
All Roads Lead to SA
In July, SME Bank’s liquidators
established a commission of inquiry
in Johannesburg after their Namibian
investigations indicated most of
the missing SME Bank money made
its way to South Africa.
Liquidators say that evidence from
FNB and Standard Bank showed that
R380 million from SME Bank “was
transferred to a number of entities
in South Africa”.
The liquidators also froze R53 million
in the accounts of Kotane and
AMFS, a cash delivery company
in Benoni that the liquidators now
allege helped launder stolen SME
Bank money.
Kotane is now in court fighting to
unfreeze his accounts and to challenge
the validity of the commission
of inquiry, at which he refused
to testify.
When first subpoenaed in August,
Kotane’s lawyer arrived with a sick
note stating he had a “medical condition”.
It was arranged that he would
instead testify in October, but the
day before he was due to appear, he
filed a court application claiming
that SME Bank’s liquidators had no
legal standing to hold a commission
in the first place, and that the liquidators
were not legitimately appointed.
Kotane showed up at the inquiry in
October, but refused to answer questions
and walked out, SME Bank’s
liquidators say.
In an affidavit attached to his
application, Kotane apparently contradicts
the statement he made last
year.
Despite previously swearing that
the R188 million “investments” were
safe and due, Kotane now denies any
knowledge of any investment, saying:
“I strongly dispute that the amount
of 196 million Namibian dollars was
invested in Mamepe Capital.”
He said he did not understand on
what basis the liquidators expected
that “any amount of money invested
by SME Bank in Mamepe Capital
should have been repatriated”.
Kotane also speculates that SME
Bank may well have lost money, but
says this “is normal in the world of
investments”.
He is also fighting SME’s liquidators
to unfreeze his R11.5 million,
which he says were legitimate fees
earned from the bank.
‘Collusion’
The bank’s liquidators fingered
Kamushinda, the Zimbabwean representative
of two minority shareholders
in SME Bank, as the alleged
“mastermind” behind the theft.
They also accuse him of abusing
the courts to wage a protracted
legal campaign to
“avoid the grand fraud from
being exposed”.
There are now at least seven
court cases in Namibia and
South Africa, mostly related
to Kamushinda raising technical
points to stop the liquidators’
investigations.
The liquidators now allege
collusion between Kotane and
Kamushinda, saying there are identical
paragraphs copied and pasted
in affidavits filed separately
by them.
In court papers,
Kamushinda says the allegations
against him are “clearly scandalous,
vexatious and irrelevant”.
He says evidence linking him to
companies that received SME Bank
money is irrelevant, adding that this
doesn’t prove he did anything wrong.
The investigation of the missing
money, and of Kamushinda, leads
to Benoni.
Cash Delivery
Apart from Kotane’s money,
SME Bank’s liquidators have frozen
another R42 million in the accounts
of Benoni company AMFS, which
they accuse of laundering money for
Kamushinda.
The liquidators had access to
AMFS’s bank statements, which
allegedly reveal that the money delivery
firm handles as much as R500
million in cash each month.
About R79 million of SME Bank’s
money found its way to AMFS, and
R64 million of that was allegedly
delivered by hand – in cash – to an
address in Springs.
AMFS allegedly paid more cash to
companies owned by Kamushinda.
It is unclear where this money
ended up, said liquidator John Bruni
in an affidavit last month.
In his affidavit, AMFS owner and
director Carlo Stickling said he had
nothing to do with these payments
because he bought the company after
they had taken place.
His lawyer did not respond to a
request for comment emailed on
Wednesday.
Luke Mouyis, the lawyer of
AMFS’s previous owner, Kalandra
Viljoen, said she attended the commission
hearings.
“It is now clear to our client that
certain misrepresentations were
made to the [company] so as to conceal
the source of the funds, but ...
our client can in no way be seen to
be complicit in any crime,” he said.
‘Fake Invoices’
Another alleged recipient of about
R24 million of SME Bank money is
Johannesburg company Moody Blue
Trade & Invest 14, which was hit with
an account freeze application after
the inquiry.
This case was supposed to have
› Andile Ramavhunga
been heard this week, but was postponed
to February.
Moody Blue is the South African
buying house for Democratic Republic
of Congo retail chain Hyper-Psaro
and its affiliate United Petroleum,
says an affidavit by its general manager
Lizelle Iverson.
In an affidavit last year claiming
that all the SME Bank money was
safely invested, Kotane initially
named Moody Blue as a nominee for
some of the SME Bank investments
he managed.
In her affidavit, Iverson said
Kotane provided “mere hearsay
and incorrect evidence”, and that
her company had not heard of him.
Instead, she claims the money
Moody Blue received from SME
Bank belongs to an SME Bank client
– a mining company in the Democratic
Republic of Congo called MCK
Katanga.
She claims MCK used its SME
Bank account to pay for goods in
South Africa for shipment to the
Democratic Republic of Congo.
She attached a series of invoices
showing MCK orders, but the liquidators
claim these are fakes, and
that the money did not come from a
MCK account, but from the bank’s
own corporate account.
In a later plea before court, Iverson
said her company was “under
the impression” the money came
from MCK. Her lawyers declined to
comment.
What they Say
In response to requests for comment,
Ramavhunga said: “Can I be
left in peace. I’ve got nothing to say to
you. Please refrain from sending me
any more messages because I don’t
even know where you got my number
from.
“If this continues, I will have to
get a restraining order against you.”
Kotane’s lawyer said: Our client is
not in a position to comment, as the
matters are currently before court,
and are as a result sub-judice.”
Kamushinda’s lawyer did not
respond to emailed questions sent
on Wednesday. – City Press