Werner Menges
21 April 2008
Windhoek — The seven people facing prosecution in connection with their alleged involvement in the Avid Investment Corporation investment scandal in 2005 will be facing ten charges, including counts of fraud, corruption and giving false evidence, at a trial in the High Court, the Prosecutor General has decided.
Legal history will be made when the Avid 7 go on trial, as the N$30 million Social Security Commission investment that was placed with Avid Investment Corporation - an inexperienced but politically connected asset management company - with disastrous results in early 2005 will be the largest amount of money yet involved in a fraud case tried in a Namibian court.
The seven made a first joint appearance in the dock in the Windhoek Magistrate's Court on Friday.
After the Prosecutor General's decision on their case and the indictment that they will face had been handed to them, Public Prosecutor Linus Samaria asked Magistrate Elsie Schickerling to transfer their case to the High Court and to order that they should make their first appearance in that court on June 19. THE CHARGES With some of the defence lawyers querying the correctness and completeness of the indictment, while also protesting that the Police docket on the case had not been disclosed to them yet, Magistrate Schickerling instead postponed the case to April 30 for another appearance in the Magistrate's Court.
According to the indictment that was handed to the seven, the Prosecutor General has decided that former Member of Parliament, Deputy Minister of Works, Transport and Communications and Swapo Party Youth League Secretary Paulus Kapia will be the first accused in the case.
The first person to be arrested in connection with the case, Nico Josea, is set to be the seventh accused in the case when it gets to the High Court. Set to go on trial with Kapia and Josea are former MP and Acting Secretary General of the National Youth Council Ralph Blaauw, Inez /Gases, who was the chairperson of Avid's board of directors, Labour Ministry official Otniel Podewiltz, who was at one stage a director of Avid, retired Namibia Defence Force Brigadier Mathias Shiweda, who was a shareholder of Avid, and Blaauw's wife, lawyer Sharon Blaauw, who was also a director of Avid.
Except for counts of fraud, alternatively theft, giving false evidence at an inquiry in terms of the Companies Act and corruption, the seven also face seven counts of contravening various sections of the Companies Act.
These include a charge of recklessly or fraudulently conducting the business of both Avid and Namangol Investments, which is an asset management company that was run by Josea and to which N$29,5 million of the N$30 million that the SSC entrusted to Avid on January 26 2005 was transferred on January 28 2005.
Other alleged offences that the Prosecutor General is charging were committed by the seven include making false statements about the financial position of Avid, and not keeping proper accounting records, a company register, a minute book and attendance register for meetings by the board of directors of Avid between April 2004, when Kapia, /Gases, Podewiltz and Blaauw became directors of Avid, and July 2005, when the SSC got a liquidation order against Avid for failing to pay back the N$30 million invested through the company.
It is claimed in the indictment that Mr Blaauw and Shiweda at all relevant times associated themselves with Avid.
FRAUD ALLEGED In the fraud charge against the seven, it is alleged that that they falsely pretended to the SSC that Avid was an established investment company with a proven investment record, established shareholders and the backing of "prominent Namibians", who are not named in the indictment.
It is further alleged that the accused falsely pretended to the SSC that if the SSC advanced N$30 million to Avid, this money would be invested for four months in a fixed-interest-rate-bearing account at an interest rate of 14,65 per cent a year, and that the money would be kept in an account with Standard Chartered Bank (SA) and would not be moved from that account by either Avid or its traders.
As it turned out, it is alleged, the money was not at all invested as had been promised.
Instead, only N$29,5 million of the SSC's money was transferred to an account of Namangol Investments, it is charged.
Josea in turn transferred N$20 million of this money to a South African bank account of Alan Rosenberg Investment Services - a supposed investment broker in South Africa - while N$1,9 million was transferred to Josea's personal bank account between February 3 and 8 2005, it is charged.
On February 8 2005, it is also alleged, a cheque of N$385 000 was issued from a Namangol Investments account to Christophine Kandara, wife of the late Lazarus Kandara, who is claimed to have been the Chief Executive Officer of Avid.
On Kandara's instructions, Mrs Kandara made cash payments to Kapia, Podewiltz, the Blaauw couple and Shiweda after receiving money from Josea, it is charged.
All the recipients falsely denied having received money from her when they gave evidence in a Companies Act inquiry in the High Court after Avid had been provisionally liquidated, it is further charged.
It is also charged that at the inquiry Kapia gave false evidence by claiming that Kandara was not involved with Avid, while he knew the contrary was true.
Josea is accused of having given false evidence at the inquiry when he denied that N$14,9 million deposited into his personal bank account by his lawyers in South Africa in mid-March was a part repayment of the money that had been transferred to Alan Rosenberg earlier.
Having received that money, Josea "thereafter dealt with it as if it belonged to him", it is alleged.
On May 24 2005, it is alleged, /Gases and Avid informed the SSC that its investment had matured, that the money had been invested in "good and secure portfolios" where it had earned interest of 14,5 per cent a year, and that a total of N$31,476 million was to be returned to the SSC.
Avid's fees for handling the investment was to be a mere N$7 382, the SSC was also informed, according to the indictment. In reality, however, the SSC's money had not been secured in an investment fund at all, it is alleged. The indictment lists the names of 66 potential prosecution witnesses.
These include Alan Rosenberg, former Labour Minister Marlene Mungunda, former SSC Chief Executive Officer Tuli Hiveluah, Cabinet Secretary Frans Kapofi, who chaired the SSC's board, former SSC managers Avril Green and Gideon Mulder, and Christophine Kandara.
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