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Publish Date : 04-Feb-2015

Revealing an apparent paradox at a dividend handover, the Namibia Procurement Fund's Chairman, Derek Wright, has announced that if the Namibia Financial Institutions Supervisory Authority (Namfisa) will not change its stand with regard to close corporations, the Fund faces closure. Criticizing the regulatory authority, he said : "NAMFISA refuses to recognize the Namibia Procurement Fund as a special purpose vehicle and as a result the fund will cease to exist."

The Fund provides fund to small and medium businesses registered as close corporations. Wright called the Fund as the only viable financier with an evaluation model and risk appetite in place to offer funds to close corporations. He said : "Close corporations are not seen as secure investments."

As part of its Unlisted Investment Portfolio, the Namibia Procurement Fund has been appointed by the Government Institutions Pension Fund as a special purpose vehicle (SPV). The GIPF, like any other pension fund, has to put a maximum of 3.5% of its total assets in unlisted investments, through so-called SPVs, under Regulation 29 to the Pension fund Act.

Wright added : "You do not have to be a proprietary limited to remove risk. As long as there is a system in place, there is no risk involved. There is no risk whatsoever with regards to investing in close corporations. Our controls are there as a security blanket. We have a fiduciary responsibility to invest on behalf of the GIPF. There is a screw lose somewhere in NAMFISA."

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