Trustco Group Holdings, a JSE-listed company based in Namibia, has for a second time this year become embroiled in a legal battle, this time with the Bank of Namibia (BON), because the institution declined to provide Trustco with N$1 billion (R1.2bn) to start its own bank.
The latest legal spat comes after Trustco, led by CEO Dr Quinton can Rooyen, in August won an urgent application in the High Court of South Africa to prevent the JSE from suspending Trustco’s share.
The judgement, after a “long battle” with the JSE, was the second urgent application that Trustco had won against the JSE.
“The hiatus created by failing Namibian banks established after Namibia’s independence, has left the majority of Namibian banking sector under foreign control.
“This results in a significant barrier to entry for a 100 percent Namibian-owned start-up bank like Trustco Bank, to successfully enter the banking industry. Such a barrier to entry results in a loss of control for Namibia over its own economy,” Trustco said on its website.
It said in a statement on Friday that it had resolved to bring Trustco Bank out of business incubation on May 31, 2022, and a proposal had been made to BON to capitalise it with N$1bn, supported by a business plan.
“The proposal by Trustco Bank, a 100% subsidiary of Trustco Group, was subsequently refused by BON, without providing satisfactory reasons for such refusal,” Trustco’s directors said.
In addition, an order was requested declaring certain sections of the Banking Institutions Act of Namibia, 1998, and the Bank of Namibia Act, 2020, unconstitutional.
“BON retaliated by threatening to bring an application for liquidation against Trustco Bank. The assumed application for liquidation has not been served on Trustco Bank as of yet,” the company said.
It said Trustco Bank was a 100% percent Namibian-owned bank with limited deposits, and a small loan book, but with “immense potential.”
Trustco said all its bank’s client’s deposits were “fully guaranteed” as Trustco Bank held more than 100% cash to cover deposits.
The dispute with the JSE that began earlier this year related to items in Trustco’s property and resources portfolios, where the JSE had alleged that Trustco failed to comply with listings requirements and relevant IFRS accounting standards, claims that Trustco has disputed.
BUSINESS REPORT