The phantom banker
Namibian authorities have called in the help of South African authorities to trace people who are suspected of having conned state companies out of at least R130-Â million of public funds under the guise of being investment managers.
The country’s Prosecutor General, Olivia Martha Imalwa, told a Namibian newspaper recently that she had mooted to South Africa’s Director of Public Prosecutions, Vusi Pikoli, that his department would be approached for assistance.
Recently, another Namibian newspaper reported that the Namibia Financial Institutions Supervisory Authority (Namfisa) has asked the Scorpions, South Africa’s crack investigation squad, for assistance in its search for the Namibian money. The Scorpions are waiting for a formal approach and an exchange of information before they go after the ring of so-called asset managers.
The appeal to the South Africans stems from cases in which two state-owned corporations transferred money (R30-million and R100-million in separate deals) to South African financial companies into what they had believed to be fixed and secured interest-bearing investments.
The Social Security Commission, a welfare organisation that derives its income from taxing workers to pay for maternity, sick, retirement and death benefits, gave R30-million to a Namibian company in January, which, in turn, passed R20-million on to a South African company to manage for four months.
Despite several promises, the Allan Rosenberg Investment Bank (ARIB), which received the money, has failed to return the funds.
Johannesburg-based Allan Rosenberg, who has been described in the Namibian courts as untrustworthy, reportedly owns ARIB. On Tuesday, the lawyers for the Social Security Commission announced in the Namibian High Court that Rosenberg’s Standard Bank account in South Africa had been frozen and that it has approached the Scorpions to trace Rosenberg. The Mail & Guardian could not trace ARIB on the list of registered South African companies. A posting on the Internet in 2003 warning of financial cons said about Allan Rosenberg Investment Bank that: “in reality he is a phantom”. Another posting says Rosenberg is the president of ARIB. Namibian authorities have no proof that ARIB even exists anywhere.
The high court heard this week that financial guarantees that Rosenberg gave through his Namibian link, Lazarus Kandara of Avid Investment, “are not worth the paper they are written on”.
The South African police have also been asked to arrest Kandara, a shady Namibian businessperson who transferred the social security money to Rosenberg. Kandara has been taunting the Namibian authorities, saying he is in South Africa and that he will return at the end of the month with the R20-million social security funds. Kandara runs Avid Investment, of which Deputy Minister in the Namibian Cabinet, Paulus Kapia, is a member. The company used its connections with the ruling party, Swapo, to pressure the Social Security Commission into entrusting it with the R30-million investments and even claimed that former Namibian president Sam Nujoma approved of the company and had shares in it. Swapo has dismissed the link to Nujoma, and it appears that the Avid owners had name-dropped to secure business.
The appeal to the Scorpions will include the R100-million failed investment given to another joint South Africa and Botswana outfit, Great Triangle Investments, by Offshore Development Company (ODC).
The ODC is located in the Namibian Ministry of Trade and Industry that was set up to promote free-trade zones. It transferred the money in several tranches between August 2003 and January 2004 into what the ODC has described as a secure interest bearing “financial instrument”. Not a cent has been repaid on the investments that were to mature by the middle of last year.
Great Triangle Investments does not exist in South Africa and its company secretaries in Botswana say the key director in that country died two years ago. The chairperson of the company, a South African director who calls himself Professor Philip Fourie, does not answer his cellphone and the company’s East London office telephone numbers are out of order.
The two investments appear to be part of a broader scam in which gullible executives of state-owned companies in Namibia were duped. It is increasingly becoming clear that the scam is run by an international network of financial conmen. Several Namibians, including Kapia, have been accused of receiving kickbacks from funds that should have been invested in fixed deposits accounts.