Namibia probes alleged graft in gov’t pension fund

WINDHOEK: Investment company Baobab Capital, which is tasked with managing N$140 million in pensioners’ money, is on the verge of being shut down over alleged financial irregularities.

Namibian-owned Baobab Capital invests in early-stage businesses, hoping to grow them into medium and large-scale enterprises.

The Namibia Financial Institutions Supervisory Authority (Namfisa) issued a public notice of deregistration last week.

Namfisa is accusing Baobab’s directors of conflicting interests and the abuse of power. The venture capital fund also had to write off some of the funds invested in companies that went bust. It was allegedly for this reason that Baobab Capital cannot be trusted with public money. Baobab’s deregistration process coincides with the Government Institutions Pension Fund (GIPF) suspending its chief investment officer, Convil Britz.

Baobab Capital is a beneficiary of the GIPF’s unlisted investment drive to pump money into Namibian companies which are not listed on the Namibian Stock Exchange. Baobab Capital was allocated N$140 million of the GIPF’s money in 2016 to manage. Around N$77.8 million of that money was committed between January 2017 and June 2019.

Some of the money was invested into eight portfolio companies, some of which are into manufacturing, animal feed, pharmaceuticals, and LED lights, and others that produce ceiling boards and salt licks. The company is appealing the proposed deregistration.

Jerome Kisting is Baobab Capital’s managing director, with Primus Hango, former GIPF chief executive officer, and Ramon Maasdorp as the company’s independent non-executive directors.

The Namibian has learnt that the tug of war between Namfisa and Baobab Capital has been ongoing since 2018. Sources say Baobab Capital has been served with a notice this month that Namfisa intends to shut the fund manager down.

The company is not only taking on Namfisa over its decision to deregister it, but is further accusing senior officials at the financial regulator of improper conduct.

Kisting last week confirmed receiving a deregistration notice from Namfisa. “My attorneys are already busy with the notice of appeal,” he said, adding that the process leading up to the regulator’s decision was questionable. Kisting said the loans were above board.

He said the loans referred to by Namfisa came from Baobab Capital and not the Baobab Growth Fund, which is the entity that received the GIPF’s money. He said the money used as loans to directors came from money Baobab Capital made in fees and savings from their operations. He added the money was being repaid, and in one case legal action has been taken against the said director.

The deregistration comes just two months after Britz’s suspension from the GIPF. It is not known if the two incidents are related. The GIPF issued a statement last week in which it assured the public that the fund’s investment at Baobab is safe.

(The Namibian)