The Windhoek Observer is in possession of a letter written by the minority shareholders’ lawyers giving Ngatjizeko an ultimatum to retract his statement or face unspecified legal action over the statements he made early this month after concerns had been raised over Governments’ ability to recapitalise the beleaguered institution in light of its liquidity challenges.
“Premised on our clients’ resolve to further their business interest in the SME Bank Limited, our clients take strong exception to the above falsehoods and malicious statements that were allegedly pronounced by your good self.
“As you will appreciate, it is our clients’ position that you should formally demand the Namibian newspaper to categorically withdraw the above statement as unfounded in all material respects, within 48 hours of the date of this letter. Our instructions are that, in the event that you fail or refuse to accept their request herein, they will exercise their rights and remedies which at this stage, remain strictly reserved,” the letter from the lawyers dated 21 June read.
In a separate communication seen by this publication, the SME Bank minority shareholders also accuse the Bank of Namibia of trying to steal the banking concern they founded in partnership with the Namibian Government, among a string of allegations, a position which they also communicated to Ngatjizeko.
“Considering our clients’ correspondences with your good office and the formal meeting held between yourself and our clients’ proxies on 4 June 2017, both our clients have expressed serious commitment to find a meaningful solution to capitalising of the SME Bank and regain its control subject to disclosure of material information, which to date remain ignored and/or to be transmitted.”
According to Metbank Spokesperson, Tendai Mutandwa, the minority shareholders told BoN Governor, Ipumbu Shiimi that they will only recapitalise the bank on condition that the apex bank releases financial records on how the bank has been run since it took over in March.
“To set the record straight, prior to 1 March 2017 when the Bank of Namibia assumed control of the SME Bank Limited, the bank was at all relevant and material times solvent with capital position in excess of 68 percent of the required regulatory minimum level and surplus liquidity position of 155 percent above the statutory minimum. This position was also confirmed by the Governor of the Bank of Namibia in his letter dated 6 March 2017 addressed to the Minister of Industrialization and SME Development,” he said.
“Committed to further our business interests, we on various occasions in writing requested the Governor of the Bank of Namibia and the Minister of Industrialization and SME Development to disclose pertinent financial reports upon which decisions will be made. To date, such crucial reports pertaining to the bank are yet to be disclosed.
“As a matter of fact, both the Metropolitan Bank of Zimbabwe Limited and Worldeagle Investment (Private) Limited are prepared to provide the required funding to recapitalise the SME Bank Limited in accordance with the Shareholders Agreement but this will only be done subject to disclosure of material information pertaining to the bank since the illegal assumption of control by the Bank of Namibia.”
The demand by the SME Bank shareholders comes as the fight for control of the bank has intensified amid speculation that Government could move to close the bank, citing lack of funds to recapitalise it.
The bank has also been linked to a takeover bid by a consortium of local business people.
SME Bank, according to the BoN, requires at least N$300 million for recapitalisation.
To date, SME Bank has no share certificates in the name of either the Government or its foreign shareholders to reflect the correct shareholding structure of the bank.
It is not clear which Namibia Financing Trust holds shares in SME Bank Limited, as there are two entities (NFT Section 21 and NFT Pty Ltd).
Namibia Financing Trust (Proprietary) Limited (registration number 2011/0531) represents the Government of Namibia on the shareholders’ agreement in respect of SME Bank Limited signed on 20 March 2012 while Namibia Financing Trust (Association not for Gain) (Registration number 21/2005/541) is named as the shareholder in the bank’s share register.
Questions sent to the Bank of Namibia were not answered, with the apex bank saying it prefers not to engage important stakeholders of SME Bank in this manner.
The ministry of trade did not respond to questions from the Windhoek Observer by the time of going to print, despite promising to do so.