The N$30 million investment that the Social Security Commission placed with an inexperienced and unproven asset management company in early 2005 was like a hurricane that spiralled out of control and left nothing but destruction in its wake.
This was one of the telling comments made by judge Christie Liebenberg in the Windhoek High Court on Friday, when he delivered his judgement in the trial of the seven persons prosecuted in connection with an investment swindle that ended up costing the Social Security Commission around N$20 million - and has now left five people convicted on criminal charges.
Judge Liebenberg found former Swapo Party Youth League leader, National Assembly member and deputy minister Paulus Kapia, fellow former MP Ralph Blaauw, and accountant Inez /Gâses guilty of fraud. That charge flowed from the role they played to persuade managers of the Social Security Commission to invest N$30 million with the asset management company Avid Investment Corporation in January 2005.
Nico Josea, the sole shareholder of the company Namangol Investments, which received N$29,5 million from a bank account of Avid after the SSC's N$30 million had been transferred to Avid's account, was found guilty of the theft of N$29,5 million belonging to the SSC, and of reckless or fraudulent conduct of business.
Josea's bail was cancelled after he was found guilty, and he is now being kept in custody.
Lawyer Sharon Blaauw, who was one of the directors of Avid when the company clinched the investment deal with the SSC, was acquitted of fraud, but found guilty of reckless conduct of business. She signed a couple of Avid board resolutions without verifying the correctness of those documents, which were presented to the SSC to put it at ease about the safety of the investment it made through Avid, judge Liebenberg found.
Two of the seven accused were acquitted. Lawyer Otniel Podewiltz - a former director of Avid who resigned from that position in November 2014 - was found not guilty of fraud and reckless or fraudulent conduct of business. Retired Namibian Defence Force brigadier Mathias Shiweda, who was portrayed as a shareholder of Avid when efforts were made to persuade the parastatal's management to invest money with Avid, was acquitted of reckless or fraudulent conduct of business.
Shiweda was found not guilty of fraud in August 2015 already, in a ruling that judge Liebenberg gave after the end of the state's case.
Judge Liebenberg said the evidence left him with no doubt that the founder of Avid, the late Lazarus Kandara, concocted a scheme to swindle the SSC out of its money, and that Josea and a South African supposed investment broker, Alan Rosenberg, had been in cahoots with Kandara all along.
He rejected Josea's claims that he did not know the N$29,5 million paid from an account of Avid to Namangol Investments had originated from the SSC, and found there was overwhelming evidence that showed Josea knew, during his dealings with Kandara and Rosenberg, that the money the SSC invested with Avid had subsequently been stolen.
Josea was a co-perpetrator, with Kandara, of the theft right from the beginning, judge Liebenberg found.
After Namangol Investments received N$29,5 million from Avid, Josea transferred N$20 million of that money to an account of Rosenberg in South Africa. By mid-March 2005, N$14,9 million had been paid back by Rosenberg - but it went into a personal bank account of Josea, who then went on a spending splurge with the money.
There was no logic in Josea's claims that the almost N$15 million received by him was a loan from Kandara, judge Liebenberg commented, rejecting Josea's version.
The evidence before him indicated that the SSC lost about N$20 million out of its investment of N$30 million, judge Liebenberg noted.
In respect of Kapia, /Gâses and Blaauw, he found that, in an effort to persuade the SSC management to invest money with Avid, they made misrepresentations to the SSC while knowing that those representations were false. However, the evidence did not show that they knew there was a plan to steal the SSC's money, or that they personally received any financial gain from the transaction, the judge also found.
Among the misrepresentations made to the SSC were claims that the Swapo Party Youth League was the majority shareholder in Avid, that Kandara, with whom the SSC did not want to do business, was not involved with Avid, and that Avid had previously handled investments totalling some N$450 million, judge Liebenberg noted.
In fact, the only previous investment that Avid handled before the SSC transaction was one in which mining company AngloGold Ashanti, at that stage the owner of the Navachab gold mine, invested N$10 million through the company in 2004.
That investment was paid back in December 2004, but in March 2005, the then general manager of the company, Fritz Jacobs, who was also a former director of Avid, abruptly resigned from his employment with AngloGold Ashanti, shortly before he was due to have a disciplinary hearing about his choice of Avid as an investment manager.
Friday's judgement brings a case that first shot to public attention in July and August 2005, with a sensational High Court inquiry in terms of the Companies Act, a key step closer to its conclusion.
The seven accused were charged in April 2008, made a first appearance in their criminal case in the High Court in June 2008, and finally went on trial near the end of May 2014, after their case had been kept in limbo by a nearly three-year wait for a Supreme Court judgement on the constitutionality of a section of the Companies Act which they had challenged.
Kandara died when he shot himself in the chest in front of the Windhoek Central Police Station on the evening of 24 August 2005, a couple of hours after he had been arrested.
Judge Liebenberg extended the bail of Kapia, /Gâses and the Blaauws after the delivery of his verdict. They and Josea have to return to court on Wednesday to have a date set for the start of their pre-sentence hearing.