February 18, 2011

Scandal over government pension fund

President Hifikepunye Pohamba, although admitting that about N$560 million of workers' pension money went missing through "irregular investments" authorised by the Government Institutions' Pension Fund (GIPF), refused to hold the fund's board of trustees accountable. Instead, he opted for the "likely" prosecution of "some individuals", but appeared to have exonerated GIPF board of trustees of any wrongdoing.

Briefing the trade unions on the findings and recommendations of Cabinet's forensic audit into the GIPF's Development Capital Portfolio (DCP), Pohamba said he was deliberately using the word 'likely', "because in terms of the Namibian Constitution, the decision whether or not to prosecute lies with the Prosecutor General". According to the President, the audit Cabinet ordered into the DCP in October 2010 found that the GIPF lost N$400 million plus the interest of about N$160 million which should have been earned on the funds if properly invested. Out of the 21 investments made, 12 "resulted in negative outflows worth N$389 951 081 while others are doing exceptionally well", he said. The BDO audit, ordered by the Auditor General, concluded that "some funds invested by [the] GIPF were not in accordance with generally accepted business principles regarding security", he said. Furthermore, "some directors and shareholders of entities which received the funds did not conduct themselves in accordance with generally accepted business principles". However, no word is mentioned of the conduct of GIPF trustees in the dishing out of millions of dollars. "Some of those involved were negligent resulting in irregular investments, therefore, they should be held liable for the losses incurred. Losses should, therefore, be recovered from them by means of due process of law," Pohamba said.

The BDO findings confirmed those of the original forensic audit the Namibia Financial Institutions Supervisory Authority (Namfisa) launched into the DCP in 2006. The Namfisa audit also recommended that individuals who signed sureties in their personal capacities should be forced to repay the money. However, the Namfisa audit also recommended that the GIPF board of trustees be replaced, as their failure, "for a considerable number of years, to exercise proper control over the investments of the GIPF, and more specifically, to call up securities once the projects fell in arrears with repayments, can be regarded as the single largest contributing factor resulting in enormous losses suffered subsequent to the investing in several doomed enterprises".

The President didn't say anything about the board of trustees. He was just as quiet on whether or not the new audit will be open for public scrutiny. Nor did he give any timeline on when "some individuals" will have to pay back the millions or on their "likely" prosecution. He did say that Cabinet accepted the findings and recommendations of the Auditor General for "immediate implementation". He also said: "I am and indeed the entire Namibian Government is most eager, just like all Namibians, to get to the bottom of this matter. I, therefore, look forward to a speedy finalisation of this matter in the interest of the Namibian nation and the public servants in particular." Pohamba said a trial by public opinion should be avoided, as this was against the spirit of the Constitution. Calling for a fair trial, he said: "It will be a sad day to see those who are liable to prosecution being acquitted because of trial by public opinion. "Let us allow the due process of law to take its course." (The Namibian)


URL: http://www.sadocc.at/news/2011/2011-031.shtml
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