Justicia Shipena
A High Court judge will continue presiding over the Bank of Namibia’s liquidation application against Trustco Bank.
The Supreme Court struck the central bank’s appeal after finding that it failed to file a valid notice of appeal.
The judgement, delivered on Thursday, found that the appeal did not meet the basic procedural rules required for the court to hear the matter.
This comes as the Bank of Namibia has been trying to challenge the judge’s refusal to recuse herself from the liquidation case.
The bank argued that judge Eileen Rakow would not approach the matter with an open and impartial mind.
The Supreme Court did not consider that argument. It focused only on whether the Bank lodged its appeal properly.
The court said the notice of appeal did not comply with Rule 7(3) of the Supreme Court Rules.
The court found the notice did not state the findings or rulings being appealed and lacked clear grounds for the appeal.
The judges said the notice was “defective”, meaning there was no valid appeal before the court.
“The notice of appeal is the foundation of an appeal,” the court said.
It added that without a proper notice, the Supreme Court cannot exercise its appellate jurisdiction.
The judges compared the role of the notice to issuing summons in the High Court because it informs the court and the opposing party about what is being challenged. In this matter, the notice did not meet that requirement.
The appeal was struck from the roll. As it was not opposed, there was no order as to costs.
The dispute dates back to 2022 when the Bank of Namibia filed a High Court application to liquidate Trustco Bank Namibia after finding it to be commercially insolvent.
According to court papers, BoN governor Johannes !Gawaxab said Trustco Bank failed to manage its liquidity risks.
At that time, the bank said it did not comply with seven out of 25 directives issued in December 2020, which required a minimum cash injection of N$100 million.
The money was supposed to be paid in three instalments over three years, with the first payment of N$33.3 million due on 31 March 2021.
!Gawaxab said Trustco Bank only created the impression that it made this payment because immediately after the money was deposited into the bank, it was transferred to Trustco Group Holdings.
BoN said Trustco Bank also stopped making payments after September 2021 on a N$10 million loan from the Development Bank of Namibia.
The documents in court show that tax authorities were owed N$17.4 million from the sale of an intangible asset and outstanding PAYE, withholding tax, and VAT up to 30 June.
BoN assessed whether Trustco Group had the financial capacity to support Trustco Bank.
!Gawaxab’s assessment showed the group recorded losses of N$988 million, its share value was declining, it had not paid dividends since 2018, and its operations were not generating enough income, with net cash used in operations at N$841 000.
The assessment noted the group’s total assets exceeded its liabilities by N$2.3 billion, which BoN said was mainly because of transfers and acquisitions reflected under investment property.
BoN maintained that Trustco Bank was factually and commercially insolvent and unable to pay its debts.
