SME Bank back in court tomorrow
WINDHOEK – The Bank of Namibia’s application to wind down and close the beleaguered SME Bank, was dealt a blow in the High Court of Namibia today.
Namibia’s central bank will have to go back to court tomorrow morning (Friday) to hear whether its application to shut down the SME Bank will continue. The already protracted legal battle will be made a day longer.
This comes after lawyers representing the bank’s minority shareholders, World Eagle and Metropolitan Bank of Zimbabwe, pointed out that the Bank of Namibia failed to follow procedure while filling for the application in the High Court.
Sisa Namandje representing the two entities, surprised the central bank’s legal bench by pointing out a technicality which suggests that they failed to follow procedure when launching the application.
Namandje brought a preliminary motion before Andrew Corbett, representing the central bank, could start presenting Bank of Namibia’s motion to the court.
Namandje’s interruption was based on the fact that section 351, subsection 4 of the Companies’ Act was not complied with. The section stipulates that before any application for winding up a company is registered or lodged with the Registrar of the High Court, such an application must first be submitted to the Master of the High Court 10 days before it is lodged with the registrar’s office.
This is because when a company is closed by the High Court it is placed under judicial management or liquidations, which is then the responsibility of the Master’s office.
Namandje insisted that this provision was not complied with meaning the Master of High Court was not accorded sufficient time to consider joining the case. Judge Hannelie Prinsloo then decided to adjourn the court proceedings to make a ruling on the Namandje’s preliminary motion. She will make a pronouncement on the matter tomorrow morning.
Bank of Namibia took over the running of the SME Bank in March this year and also decided to remove the bank’s top management and its board of directors. The central bank alleged that investors’ and depositors’ money was not safe in the hands of the bank’s board and management. The Bank of Namibia made its decision based on what it said was the disappearance of N$200 million of SME Bank clients’ money.
This is the second legal challenge between the two parties as the removed directors and managers have also launched a legal case challenging their removal by the central bank, calling it illegal.