The liquidators of the Small and Medium Enterprises Bank have been granted a judgement that would allow them to have the assets of government official Esau Mbako attached in a bid to recover N$910 000 which he received from the bank.
With the bank’s liquidators, David Bruni and Ian McLaren, suing Mbako for N$970 000, judge Eileen Rakow last week granted a summary judgement against Mbako in an amount of N$910 000, after finding that he did not have a defence against a claim for that amount.
Mbako, who is the executive assistant to the minister of agriculture, water and forestry, has acknowledged that he received N$970 000 from the former deputy chairperson of the SME Bank’s board of directors, Enock Kamushinda, between September 2015 and December 2017. According to him, he received the money as a loan from Kamushinda.
No written loan agreement was signed by them and no repayment arrangements were agreed either.
Kamushinda, who is a Zimbabwean businessman, played a key role in the alleged large-scale looting of the SME Bank, which led to the bank’s closure in 2017 and subsequent liquidation – to such an extent that acting High Court judge Collins Parker, in a judgement delivered on 29 October this year, declared him liable for the bank’s liabilities.
Parker also granted a judgement against Kamushinda for the payment of N$1,02 billion to the bank’s liquidators, after finding that Kamushinda not only knew the SME Bank was being defrauded while he was serving as one of the bank’s directors, but that he and two of his companies also received money stolen from the bank.
In her judgement, Rakow noted that Mbako could not satisfactorily explain why the bulk of the payments he received as supposed loans from Kamushinda did not come from Kamushinda directly. Mbako could also not show that those payments had in fact been made under an agreement with Kamushinda, Rakow said.
She also stated that Mbako did not disclose how payments expected from Kamushinda were paid through other companies that had received money from the SME Bank, and, in some instances, were paid into bank accounts of his wife, Pearl Mbako, and the close corporation Yatsua Investments CC, of which his wife is the sole member.
According to Mbako, he received a total amount of N$60 000 directly from Kamushinda, but there was no evidence showing that payments totalling N$910 000, which he also received and that were traced back to the SME Bank, could be justified, Rakow said.
She further remarked that Mbako’s version that he and Kamushinda agreed orally in 2010 or 2011 that Kamushinda would be lending money to him did not explain why he started to receive payments from the SME Bank, through a South African company, only from September 2015.
According to the liquidators, it was discovered during an investigation of the SME Bank’s affairs that at least N$247,5 million had been stolen from the bank through fraudulent transactions, and that N$79,8 million had been paid to a South African close corporation, Asset Movement and Financial Services (AMFS), as part of the fraudulent scheme that led to the bank’s financial collapse.
It was also discovered that AMFS paid N$170 000 to Mbako, N$245 000 to his wife and N$380 000 to Yatsua Investments CC, while Mbako’s wife also received N$115 000 from two companies to which AMFS had made payments, Rakow recounted.
She noted that Mbako admitted he received all of the money in question, and remarked that there was no explanation why some of the money had been paid first to Yatsua Investments and his wife, instead of directly to him.
Mbako commented on Tuesday that he had no knowledge the money he received had originated from the SME Bank. He said as far as he was concerned, the money was coming from Kamushinda, who had agreed to lend the funds to him.
Mbako also said he trusted Kamushinda. “Had I known Kamushinda was that type of character, I would not have gone to him,” he said.
It was unfair to brand him as having been involved in irregularities in the bank, Mbako stated.
Senior counsel Raymond Heathcote, assisted by Jesse Schickerling, represented the liquidators in the case. Mbako was represented by Slysken Makando.