NBFIRA charges former Getbucks CEO

Former CEO of Blue Employee Benefits Botswana, David van Niekerk, is facing multiple counts of charges that flow from his mangled reputation at the defunct company. NBFIRA is questioning how he conducted himself in a manner that the regulator says is inconsistent with the requirements of a key person or a fit and proper person who is a controller of a non-bank financial institution (NBFI). [ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="1" ] In a submission to van Niekerk, NBFIRA has listed charges to afford him an opportunity to show cause why he thinks the regulator should not declare him not fit and proper to be a key person or controller of an NBFI. Should he be found guilty, he will be unable to become a controller in any regulated non-bank financial institution for a minimum period of five years. The Business Weekly & Review has established that NBFIRA gave van Niekerk 21 days from the 27 September 2022 to make representations and/or request a hearing and arrange a suitable date for the same where he shall show cause why NBFIRA should not impose a penalty. This publication has seen a letter dated 27 September 2022 addressed to van Niekerk in which the Authority states that during van Niekerk’s tenure as a controller of Blue Botswana, he conducted himself in a manner inconsistent with the requirements of a key person or fit and proper person who is a controller of an NBFI. Accordingly, the Authority has preferred the seven counts of charges. According to the NBFIRA Fit and Proper Rule 1.1, financial services laws require persons intending to become controllers and/or key persons of prudentially regulated non-bank financial institutions to be fit and proper and to demonstrate the qualities and traits that will allow a controller, or director, to perform the duties and carry out the responsibilities of his or her position with the regulated entity. Further, Rule 6 states that the assessment by the regulatory authority of whether a person is of good character shall include whether the person has engaged in any business practices which are deceitful, oppressive or otherwise improper (whether unlawful or not), or which otherwise discredit his/her professional conduct. The NBFIRA Act states that key person means the chief executive officer, directors, chief financial officer, company secretary, compliance officer, internal auditor of a company or any person carrying out similar functions. In count 1, the Authority is charging van Niekerk of contravening Rule 6 of the Fit and Proper Person Rules for Controllers and in particular Rule 6.1.10 as read with Rule 1.1 and Section 2 and Section 2(2)(a) of the NBFIRA Act. According to the particulars of Count 1, NBFIRA states in the letter to van Niekerk that until August 2010 he served as CEO of Blue Financial Services Limited, the company being a regulated entity. In accordance with the NBFIRA Act and the Fit and Proper Rules for Controllers, he was a controller by virtue of Section 2. NBFIRA states that in May 2008, a share agreement was signed between Blue Botswana and Nedfin Limited, Nedfin being a Zambian financial services company. The crux of the agreement was for acquisition of Nedfin’s entire share capital at the price of $9 million. According to a letter, it appears that van Niekerk had further represented to the Board that the acquisition would be funded through a loan from Standard Chartered Bank. Thus, on 21 April 2008, the Board of Blue, by way of a resolution, stated that the acquisition of Nedfin would proceed and van Niekerk was authorised to sign all relevant documents on behalf of Blue for a loan not in excess of $9.5 million. Under this acquisition agreement, van Niekerk is said to have signed on behalf of the purchaser, Blue Botswana. An addendum dated 6 June 2008 that included the amendment of the purchase price in the sum of $3,457,259.00 in excess of the initial purchase price was made. According to NBFIRA, this addendum was signed by van Niekerk and was done without relevant authorisation of the Board. It resulted in prejudice to Blue as the price was in excess substantially to the maximum set by the Board in its Resolution. According to the particulars of Statement of Offence of Count 2, on 25 March 2021, Blue South Africa was placed under business rescue due to the fact that while van Niekerk was CEO, he - together with his executives - had tampered with the accounts and the reporting thereof in the ledgers. In Count 3, around August 2010, the former Financial Director of Blue South Africa, Grant Chittenden, presented a letter to the Board of Directors in which allegations of irregularities and misconduct were set out against van Niekerk. According to the NBFIRA letter, the Board found van Niekerk’s explanations lacking and consequently initiated an investigation against him. Subsequent to the investigation, a case was registered with the South African Police Service, as well as a forensic report conducted in August 2011 and another expert report conducted around November 2018. The letter says the 2018 expert report uncovered the fact that van Niekerk and his executive circle had deliberately and intentionally hidden the non-payment of debts to his benefit and kept dual ledgers. Count 4 states that with regard to the USD9 million share agreement between Blue Botswana and Nedfin Limited Nedfin of Zambia signed on 8 May 2008, the practice was that when a transaction is being undergone, a due diligence report is to be done, either internally or externally. NBFIRA says for the due diligence to be done internally it is to be of the sum of R20,000,000.00 or less while anything above is to be done externally. The fact that the Nedfin transaction was above R20,000,000.00 and that an external due diligence would therefore be required was discussed in a Blue Board Meeting dated 30 January 2008. However, inspite of this, van Niekerk is said to have failed to ensure that this practice was followed. In Count 5, NBFIRA states that Nedfin, the Zambian financial services company, was owned by the Jonck family, which was represented by Johannes Hendrikus Jonck, a former co-worker of van Niekerk. “Therefore, while you signed the agreement and its addendum on behalf of Blue Botswana, JH Jonck signed on behalf of Nedfin, which brought the purchase price to a total $12,457,259.00. You had represented to the Board that Standard Chartered Zambia was likely to finance $ 9,000,000.00 for the acquisition. However, the acquisition was ultimately financed by African Holdings, a company in which you are a guarantor member, and African Banking Corporation. African Holdings specifically paid for the additional amount reflected in the addendum,” reads the letter that further states that van Niekerk failed, neglected or refused to disclose the fact that he is a guarantor member of AH, and as such stands to benefit from this transaction. Moreover, NBFIRA says, he failed to disclose his relationship with JH Jonck to the Board. Count 6 says on or around 24 September 2018, by an order in the High Court of Botswana, Blue Botswana had its accounts frozen and was placed under temporary closure. According to Count 7, 25 March 2021, Blue was placed under business rescue due to the fact that while van Niekerk was CEO, he - together with his executive - had tampered with the accounts and the reporting thereof in the ledgers. NBFIRA says the misrepresentation orchestrated by van Niekerk resulted in Blue not recovering several outstanding debts, which are now sought by Blue and its appointed business rescue practitioner against van Niekerk in an ongoing matter at the Gauteng Division of the High Court of South Africa. The Business Weekly & Review , spoke to van Niekerk through his attorneys Minchin & Kelly. “ We confirm that the letter from NBFIRA addressed to our client was received by him and a comprehensive response to each and every allegation contained therein was provided on 26 October 2022. We also confirm that our client has requested a meeting to discuss the letter from NBFIRA and the allegations contained therein,” the attorneys respond. They say in the response that Blue was a solid corporate citizen in Botswana until 2010 when ‘our client’ resigned. The attorneys say that to date Blue remains in Business Rescue and no further steps have been taken by the appointed business rescue practitioner to place Blue into liquidation. “Dave Van Niekerk was transparent, forthcoming and duly disclosed the necessary information at all material times. The board was duly informed and made independent and informed decisions on the basis of what was furnished,” they say. Further, they say Dave Van Niekerk has not been the subject of any adverse judgment, rulings or wards. “Furthermore, under Dave Van Niekerk’s guidance Blue Botswana was a successful credit provider employing more than 200 people and supporting many corporate social initiatives in the country.,” the attorneys respond. NBFIRA has therefore given van Niekerk 21 days to make representations and/or request a hearing, arrange a suitable date for the same, and show cause why the Authority should not impose a certain penalty. If no hearing is requested, NBFIRA shall, immediately after the lapse of 21 days, invoke the provisions of the Fit and Proper Person Rules For Controllers, the NBFIRA Act and any other relevant legislation to impose the penalty or take any action deemed necessary. Should he be found guilty and declared not fit and proper, van Niekerk will be unable to become a controller in any regulated non-bank financial institution for a minimum period of five years. NBFIRA had not responded to questions from The Business Weekly & Review at the time of going to press. [/ihc-hide-content]

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NBFIRA charges former Getbucks CEO

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