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Central bank launches High Court application to shut down SME Bank

Central bank launches High Court application to shut down SME Bank

SME Bank’s ‘goose is cooked’ and it faces possible liquidation. The Bank of Namibia on Tuesday said it has initiated proceedings in the High Court of Namibia seeking the winding-up of the Small Medium Enterprises Bank (SME Bank).

Deputy Director: Corporate Communications, Israel Zemburuka, told the Economist that the proceedings will seek the complete liquidation of the bank, of which it will see the process of selling all the assets and dissolving the business. “In simple layman’s terms, we have put in an appeal to shut the bank down,” he added.

Asked if there where potential suitors, who had their eyes on the defunct SME, Zemburuka said that at the moment the bank can not comment on the issue. A fortnight ago, an SMS invitation for SME Bank investors circulated under the name of a well-known businessman, asking for a N$2 million contribution from interested equity investors.

Meanwhile, Bank of Namibia Governor, Ipumbu Shiimi stated, “While the Bank of Namibia, is aware of the anxiety these actions may cause to employees, depositors, creditors and other parties, it nevertheless calls for calm during this period and urges all stakeholders to cooperate fully and exercise the necessary patience.”

SME Bank’s troubles surfaced in March, when it was placed abruptly under curatorship by the Bank of Namibia and the then CEO and two other top officials were fired after it was discovered that there was authorisation of certain investments that the central bank had deemed unsound. The central bank was then of the opinion that these investment carried the potential to put the bank’s stability at risk. This week’s High Court action however, signals the obliteration of the bank as a trading entity.

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