24 Nov 2025
Namfisa must pay back investors after negligent supervision in Prowealth collapse
The Supreme Court of Namibia has ruled that the Namibia Financial Institutions Supervisory Authority (NAMFISA) was negligent in its supervisory duties over Prowealth Asset Managers (PAM), which collapsed in December 2008 following the suicide of its founder, Riaan Potgieter.
The judgment, delivered by Acting Judge of Appeal Dave Smuts and Judge of Appeal Hosea Angula, upheld an appeal against a previous High Court ruling, finding NAMFISA liable for losses suffered by investors after August 2005. A dissenting opinion by Judge Sylvester Mainga argued the appeal should have been dismissed.
Key Facts:
Background: PAM operated a fraudulent scheme where investor funds were used for operational costs and personal enrichment rather than investments.
Collapse: The company’s bankruptcy was exposed after Potgieter’s death in 2008.
Losses: Approximately N$75 million of investors’ funds were misappropriated.
Legal Action: In March 2012, 87 investors, PAM, and its liquidator Alwyn van Straten sued NAMFISA, auditing firm SGA, and Potgieter’s estate executor. The initial claim was N$105.7 million, later reduced to N$58.6 million after settlements and recoveries.
Negligence Findings:
NAMFISA registered PAM as an asset manager in August 2003 despite non-compliance with key requirements (e.g., trust account number).
NAMFISA failed to demand annual financial statements, which would have revealed PAM’s insolvency and irregularities as early as 2005.
Expert witnesses testified that NAMFISA’s conduct fell short of prudent supervisory standards.
Impact: Many plaintiffs were pensioners; some died before the case was heard.
Representation: Plaintiffs were represented by Senior Counsel Jean Marais, assisted by Jesse Schickerling and Japie Jacobs, on instructions from Barend Jacob van der Merwe Snr at VDMG INC. NAMFISA was represented by Sisa Namandje and Thabang Phatela.
Next Steps: The Supreme Court will determine the exact compensation amount later.
This ruling reinforces accountability in financial regulation and investor protection in Namibia.Article from The Namibian: https://www.namibian.com.na/namfisa-must-pay-back-investors-after-negligent-supervision-in-prowealth-collapse/
