Conflict of interest allegations have been raised against the Namibian Stock Exchange (NSX) Chief Executive Officer, Tiaan Bazuin, after it emerged that he is a director of Paratus Group, a company which is significantly invested in newly-listed company, Nimbus Infrastructure Limited.
The development has raised concerns that Paratus could have benefited from its relationship with Bazuin when it sought and was granted approval for Nimbus’ listing on the NSX.
The incestuous relationship concerns also come as the bulk of the funds raised from institutional and private investors during the listing, will be channeled towards the expansion of Paratus, directly benefiting Bazuin, who sits on the company’s board.
Although Bazuin admitted a conflict of interest existed because of his roles at the local bourse and Paratus, he maintained that he had recused himself during the approval process of the listing.
“It does create a conflict of interest and accordingly I was not part of the approval process for Nimbus, I recused myself. The approval was done by the external listing committee and by the board, while the NSX CFO dealt with the Issuer,” Bazuin told the Windhoek Observer.
It is not clear at what stage Bazuin recused himself in the listing process or if he was present during Paratus’s board meetings, which approved the planned listing of Nimbus.
The Windhoek Observer could also not ascertain if he had sat on the company’s listing committee and contributed to how it can go about listing the infrastructure company.
Bazuin’s role at Paratus, which manages a company listed on an exchange that he leads, has also raised concerns about his impartiality in future regulations that might be planned by the bourse, which may be detrimental to Nimbus.
Bazuin downplayed his role at Paratus, saying that he has no shares in the company.
However, sources said that he was still entitled to remuneration for services rendered to the company.
According to the listing statement, Nimbus is managed by Paratus and is currently looking at a number of potential transactions and retail investors in ICT projects.
Nimbus completed a private placement of 10 220 850 of its ordinary shares during the course of September, raising N$102 million in the process.
Nimbus was established with the express purpose of being listed on the NSX as a capital pool company looking to acquire viable assets that satisfy the ICT sector investment criterion and are primarily geographically located in sub-Saharan Africa.
“The board believes that Nimbus is well placed to compete for, and complete, the acquisition of viable assets,” the company said.
The Minister of Finance has proposed an increase in the local asset requirement for Namibian pension funds from the current level of 35 percent to 45 percent by October 2018.
“Therefore, the introduction of new listed equity, particularly in a sector for which no listed equity exists, will help to provide additional investment opportunities and sector diversification for contractual savings,” Bazuin said.
He added that listings like that by Nimbus can create a platform to fund large infrastructure projects that are difficult to fund via traditional finance, such as power generation and water solutions.
He further said that because of the changes in the domestic asset requirements, the NSX will require more local stocks as pension funds need higher risk and reward assets if they wish to grow at a pace that stays ahead of and grows higher than inflation.
The directors of Nimbus include Schalk Erasmus, the current Chief Operating Officer of the Paratus Group.
Other directors are Stefanus de Bruin, the Chief Financial Officer of the Paratus Group, Morne Mostert, a director on the NSX, Hans-Bruno Gerdes, a corporate attorney, Amuenje Brown, Stuart Birch, Josephine Shikoongo and Christoph Stork.