Robben Islanders ‘fleeced’

WHAT was supposed to be a retirement benefit for 62 of Namibia’s freedom fighters, imprisoned on Robben Island during the apartheid era, has turned into a legal quagmire in the wake of the collapse of United States-based WexTrust and its South African and Namibian affiliates.

Documents filed in the High Court last week brought to light evidence of a case in which 1 196 American investors were swindled out of about $250 million (about N$2,5 billion at the time) by Wextrust, an investment fund based in Norfolk, Virginia.Of this, N$400 million was to be invested in diamond mines in Namibia and in South African-based Pure Africa Holdings, a web of companies run by former Armscor manager Michael van der Merwe.In this latest instance, the Namibian Former Robben Island Prisoners Trust (NFRIPT) leased a diamond property (Block 3) they held on the Orange River to Pure Africa Holdings via a Namibian subsidiary called Deva Investments. Wextrust had raised about N$110 million from investors in the US and Israel to invest in developing the mining property, situated 90 kilometres upstream from Oranjemund.But very little – if any – of this cash appeared to have reached Block 3, where workers and suppliers have now attached mining equipment worth N$7,5 million in lieu of unpaid wages and bills. NFRIPT was to receive 30 per cent of profits from this mine – but to date has not seen a cent from the deal, which was supposed to be used to look after Namibia’s most prominent former freedom fighters.NFRIPT chairman Helao Shityuwete was also shocked to discover that Van der Merwe had in fact sold a large portion of the shares in Block 3 to another US investor, an Iraqi security contractor called Larry Costa. ‘Our deal was with [PAH], we know nothing of Costa,’ said Shityuwete, a veteran liberation fighter who spent 18 years on Robben Island. Wextrust owners Steve Byers and Joe Shereshevsky were arrested in August and charged by the US Securities Exchange Commission (SEC) for operating a pyramid scheme. Both face criminal and civil charges.While Shereshevsky and Byers have been co-operating with the US court-appointed liquidators Dewey & LeBoeuf, Van der Merwe however has so far showed every sign of refusing to return the N$400 million owed to the US investors.Van der Merwe and his accountant Sybrand Hanekom have been facing an ongoing enquiry in terms of Section 417 of the Companies Act in Pretoria, where the liquidators have been trying to establish from them what happened to the money. A perusal of the liquidation application for Deva showed that Van der Merwe had, instead of investing the US funds directly in the mines as directed, instead created a web of subsidiary companies that used commercial loans to finance the equipment instead. These companies, numbering at least 35 at the last count, were registered in the name of Van der Merwe’s family members and close associates, according to company records.When the bomb burst over Wextrust in August, Van der Merwe used one of these, a labour-hire outfit owned by his sister Euzita Henning, to liquidate PAH for an unpaid bill of N$1,7 million a month later.Transcripts of the Section 417 inquiry attached to the Deva liquidation application show that Van der Merwe denied that this was an ‘arranged liquidation.’ But a sworn affidavit by former employee Carlos du Plessis, who ran one of the SA mines, made it clear that this was indeed the case.After Wextrust was put in liquidation, Van der Merwe wanted to block the liquidators from accessing internal confidential company information ‘…and decided that Euzita Henning should use Storm to liquidate [PAH subsidiary] Pure Africa Minerals,’ Du Plessis told the liquidators.Although PAH received about N$400 million from Wextrust, it appears to have burnt through a huge amount of cash in the space of three years: documents attached to the application for Deva Investments’ liquidation indicate that PAM’s liabilities exceeded its assets by N$55.7 million.In a balance sheet submitted by Van der Merwe in PAM’s liquidation, long-term loans of only N$220,7 million were recorded – leaving the question of where and how the balance of about N$180 million was spent by Van der Merwe.While the investigators continue their probe, part of the liquidation of PAM’s assets appears to have again benefited Van der Merwe’s family. Same company sources said repossessed mining equipment worth N$10,3 million was sold to Van der Merwe’s brother Pieter for as little as N$1,4 million in February this year.All that appears to remain as assets in Deva are about 70 carats of diamonds kept at a safe in a local Rosh Pinah bank, but Deva staff members said Van der Merwe had two weeks ago given instructions that these are to be sold to pay off the wages.Given that PAH is in liquidation, this was clearly illegal, sources close to the investigation said. * John Grobler is a freelance journalist; 081 240 1587