THE Government Institutions Pension Fund (GIPF) has declined a multimillion-dollar funding request by Jerobeam Kongo Mokaxwa despite legal advice to the contrary.
The GIPF received a request from Mokaxwa’s Kongom Trading CC, via the fund’s Preferred Investment Property Fund (PIPF), in September 2012, seeking funding to develop upmarket residential units in Ongwediva.
According to the acting chief executive officer of the GIPF, Maria Dax, the project’s development costs amounted to N$29,8 million during the first phase.
“In the second phase another N$23,8 million would be required to complete the remaining 60 units, but only funding for phase one has been requested for now.” She said the trustees of PIPF are responsible for making sure that the project is viable before sending a funding request to GIPF.
When GIPF received the request, management conducts a validation exercise to satisfy itself that the project complies with the requirements of the Trust Deed as well as the Investment Charter.
“A validation exercise was done on Kongom Trading CC by GIPF and its trustees considered all facts about the project ... They however became uncomfortable with the possible association of GIPF and PIPF with the developer, Jerobeam Kongo Mokaxwa, who is facing a pending high-profile corruption case in Namibia,” said Dax.
The 33-year-old Mokaxwa is one of three people accused of having defrauded the Ministry of Finance of millions of dollars with the supply of Chinese-made X-ray scanning equipment to Namibia’s customs authorities. The two other accused are Teckla Lameck and Chinese national Yang Fan. The fraud case has been postponed until mid-April next year.
PIPF chairman Jacob Hifindaka told The Namibian that the funding application by Mokaxwa’s company was subjected to the standard investment analysis process in terms of market, financial investment analysis and viability, like any other funding proposal.
“We found that the investment proposal was viable and in compliance with the requirements of the Trust Deed.”
However, he said when they reached the point of conducting due diligence on the parties involved, it was noted that the principal applicant had a pending legal case, and at this point the question arose whether the fund was allowed to discriminate against an individual who has not been found guilty by a court of law.
“Upon seeking advice from our legal counsel the answer we received was ‘no’, as we could be liable to damages for discrimination if the individual was to be found innocent of the pending charges. However, following a review of the proposed investment by the Trust’s Investment Committee and Governing Board of Trustees, funding for the project was declined by the GIPF, which the Fund accepted,” said Nghifindaka.
“What happened with the constitutional principle of innocent until proven guilty,” asked Mokaxwa.
He said the GIPF chose to personalise the request although it was the company that had applied for the loan
“It is a viable project and the company even offered a 50% profit sharing with the GIPF. This should be a clear signal that nobody want to enrich themselves in the company but that we have the needs of the people at our heart. The company is dealing on a daily basis with the banks and there are no problems,” said Mokaxwa.
But Dax pointed out that the GIPF board of trustees have a fiduciary duty towards its members and the reputation of the fund.
“They cannot turn a blind eye on the fact that the developer is involved in a high-profile court case,” said Dax.