BoN ready to defend its supervisory actions against TGH in court

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The Bank of Namibia (BoN) has announced that it will vigorously defend its supervisory actions to ensure that the country’s financial system remains sound and stable.

This follows an approach by Trustco Group Holdings (TGH) to the High Court of Namibia to seek recourse against BoN’s decision to deny TGH’s N.dollars 1 billion investment into the Namibia banking industry.

BoN’s Director of Strategic Communications and International Relations, Kazembire Zemburuka, in a media statement on Tuesday, said the central bank has taken note of the legal action launched by Trustco Holdings.

“The financial system remains stable and sound due to the effective regulatory and supervisory framework in place, which fosters a world-class financial system,” Zemburuka explained.

In the aftermath of two years of correspondence and threats between Trustco Bank Namibia Ltd (TBN), TGH Limited and BoN to enable TBN to enter into full commercial banking operations, and after TGH offered to capitalise on TBN’s balance sheet by a further N.dollars 1 billion, the central bank still denied the application, said Quinton van Rooyen, Group Managing Director of Trustco Group.

In a statement on Monday, Van Rooyen said TBN and TGH, unfortunately, had no choice but to file a Notice of Motion to Review several directives and decisions issued by BoN against TBN since 25 July 2022 in the High Court of Namibia, in Windhoek on 23 Friday, September 2022.

In terms of the notice, TGH and TBN claim that the directives and decisions issued by BoN were unconstitutional on several grounds. Firstly, it said, that sections 72A and 73B of the Banking Institutions Act 2 of 1998 (the Act) are unconstitutional, as they violate Article 10(1) of the Namibian Constitution, practising unfair discrimination, as it only allows certain orders to be reviewed.

Secondly, it explained further that section 58(4) of the Act is unconstitutional, as it serves to restrict TBN’s Article 21(1)(j) fundamental freedom to carry on its business.

“Finally, both the Act as well as the Bank of Namibia Act was passed without compliance to Articles 98 and 101 of the Constitution,” it added.

However, Zemburuka maintained that BoN will vigorously defend its supervisory actions.

Source: The Namibian Press Agency