19 February 2013

Namibia: Ex-Trustees Left With Conman's Mess

THE fraud committed by a South African confidence trickster in Namibia ten years ago is continuing to be a headache for a group of prominent Namibians who agreed to serve as trustees of an organisation that was supposed to do welfare work among orphaned children.

The former trustees of the Esperanza (Nam) Trust, which alleged fraudster Peet Britz created as a supposed welfare organisation in September 2002, last week failed with an attempt to have civil claims against them in their personal capacities dismissed in the High Court in Windhoek.

Four people who were convinced by Britz to lend a total of N$1,4 million to Esperanza (Nam) Trust before he left Namibia are trying to hold the former trustees personally liable for the money that they lost to Britz's persuasive but deceitful ways.

The former trustees who still have to deal with the fallout from the financial mess left behind by Britz are the deputy minister of trade and industry, Tjekero Tweya, Namibia's ambassador in Angola, Grace Uushona, the chief executive officer of the Lüderitz Waterfront Development Company, Fluksman Samuehl, the master of the High Court, Elsie Beukes, John Nauta, Flip Bredenhann, and Wolf Ritter.

In a judgement delivered by Acting Judge Kobus Miller late last week, the former trustees failed in a bid to have the claims against them dismissed following the close of the case for the plaintiffs, who are suing them for a combined N$1,4 million.

Tweya, Uushona, Nauta and Ritter however succeeded in shaking off a claim of N$500 000 against each of them, when Acting Judge Miller ruled that they did not need to present an answer to that claim to the court any more.

The plaintiffs are farmer Eduard Herbert, who claims to have lent N$1 million to Esperanza Trust, which was represented by Britz, Johannes Jacobus Koen, who claims to have provided a loan of N$100 000 to the trust, Willa Koen, who says she lent the trust N$292 000, and Eugene Koen, who claims to have lent the trust N$10 000.

Herbert provided the N$1 million loan to the trust in two instalments of N$500 000 each, on February 3 and August 1 2003.

When the first loan of N$500 000 was provided to the trust, Ritter and Uushona were not yet trustees of Esperanza (Nam) Trust. When Herbert extended his second loan to the trust, Tweya and Nauta were no longer trustees.

Britz, Tweya, Nauta and Bredenhann were the founding trustees of the trust from early September 2002, and were joined as a trustee by Beukes at the end of October 2002. Tweya and Nauta resigned as trustees on May 15 2003, while Beukes resigned at the end of October 2003.

Uushona, Samuehl and Ritter became trustees in August 2003. By the end of October 2003, when she was about to take up a diplomatic posting as Namibia's ambassador to Cuba, Uushona resigned as a trustee, while Samuehl resigned in early November 2003.

By then, though, Britz had already stolen or embezzled the money he had been lent by the four plaintiffs from January 2003 to August 2003, they are claiming.

The former trustees are denying that they breached their duty towards the plaintiffs.

Acting Judge Miller found that in law trustees are not absolutely immune to being held liable in their personal capacities.

He recounted that Britz, who died in early 2004, had a scheme in which he solicited loans from members of the public, and that this was in many ways reminiscent of a pyramid scheme, in which the money procured from new recruits into the scheme is used to repay previous recruits.

On the facts before him at this stage, Britz was left to his own devices without any oversight or control by any of the trustees, Acting Judge Miller remarked. Britz was also not held accountable to the trustees or to Beukes in her capacity as master of the High Court, the judge added.

"It would appear that the trustees all adopted a passive role and showed no interest in how the trust was conducting its affairs," Acting Judge Miller commented. "No meetings of any note took place, nor were the books of account, if they existed, examined. They, the trustees, did not call for financial reports or statements."

There is no dispute that the money borrowed from the four plaintiffs was wasted away or stolen, he noted.

Acting Judge Miller found that on the facts before him at this stage, a reasonable court may find that the former trustees are personally liable for the periods during which they held office as trustees.

The hearing of evidence on behalf of the former trustees will now have to continue at a later stage.

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