The suspension of the board of the SME Bank in Namibia is not an indictment of the individuals affected by the decision, Bank of Namibia (BoN) has said.
BY BUSINESS REPORTER
BoN deputy director corporate communications, Kazembire Zemburuka told NewsDay that the action by BoN should not in any way be construed to be an indictment on the individuals affected by the decision.
“Their removal is solely based on ensuring an independent and objective assessment of the investment portfolio of the SME Bank of Namibia. If the investments are established to be sound, any risks to the stability of SME Bank is mitigated, it should then follow that individuals originally affected by the decision of the Bank of Namibia could potentially serve in whatever capacity in the Namibian banking industry in the future,” he said.
“However, such individuals will need to undergo a fit and probity test administered by the Bank of Namibia on individuals serving in leadership roles in banking institutions.”
The BoN last week, dissolved the board on suspicion that certain investments made by the bank did not conform to sound investment principles and “can potentially pose a risk to the stability of the bank.” The transactions involved N$200 million (about $15 million).
The dismissed board consisted of Frans Kapofi (chair), Petrina Nakale, Theofelus Mberirua, Milka Mungunda, Enock Kamushinda, Ozias Bvute and bank CEO Tawanda Mumvuma.
If investments by SME Bank were not sound and the involvement of those removed proven, they would be prohibited from holding any position in the Namibian banking sector.
“In the event where the investments in question are not sound and their involvement is proven, then the provisions of section 56 of the Banking Institutions Act will apply, which prohibit any person so removed to hold any office or participate in the affairs of any banking institution or of a bank controlling company, unless the Bank rescinds or modifies the removal Order upon written application by such person,” he said.
Mumvuma was chairman of Banker’s Association of Namibia (BAN), a grouping of banking CEOs.
“Therefore, this is a designated role by virtue of their status as CEO’s of their respective banking institutions.
Consequently, any termination of employment automatically disqualifies the individual concerned from acting on behalf of BAN,” Zemburuka said.