SUPREME COURT HOLDS NAMFISA LIABLE IN MULTI-MILLION DOLLAR INVESTMENT LOSS CASE

The Supreme Court of Namibia has handed down a landmark judgment against the Namibia Financial Institutions Supervisory Authority (NAMFISA), holding the financial regulator liable for losses suffered by investors in the collapsed investment firm Prowealth Asset Managers (Pty) Ltd (PAM).

The case stems from the collapse of PAM followingNMQ1-CSIF-YDKL by its late sole director, Riaan Potgieter, whose actions resulted in millions of dollars in investor losses. After PAM was liquidated, affected investors and the company’s liquidator instituted legal proceedings against NAMFISA, arguing that the regulator failed to properly supervise the company despite its statutory obligations.

In earlier proceedings, the High Court dismissed the claims, finding that NAMFISA enjoyed statutory protection against liability unless bad faith or recklessness on the part of its officials could be proven. The court held that such allegations had not been sufficiently established.

However, the matter proceeded on appeal to the Supreme Court, which in a majority judgment delivered in November 2025 found that NAMFISA had breached its statutory duty of care owed to investors whose funds were managed through PAM.

The latest judgment dealt primarily with the quantification of damages. Investors initially sought compensation amounting to approximately N$48 million. NAMFISA attempted to argue that some investors had contributed to their own losses through negligence and that certain portions of the claims should therefore be reduced.

The Supreme Court rejected this argument, holding that contributory negligence should have been addressed during the liability phase of the proceedings and could not be introduced at the later stage dealing with damages.

Following deductions and adjustments to the claims, the Court ultimately awarded damages in the amount of N$35,111,583.04, together with interest thereon at the rate of 20% per annum from 4 March 2022 to date of full and final payment. The total amount, as calculated by expert witness Neil Mchardy at N$65,278,685.62, is payable within 30 days of the date of the Court’s judgment.

The judgment marks the end of a lengthy legal battle spearheaded by Adv Jean Marais SC, Adv Jesse Schickerling and Adv Japie Jacobs on instructions from Ben van der Merwe (Snr) of Van der Merwe-Greeff Incorporated. By awarding more than N$35 million in damages plus interest, the Supreme Court has provided long-awaited relief to affected investors while reinforcing the importance of proper financial oversight.

The ruling is likely to remain a significant reference point in future matters involving regulatory accountability and the protection of investors within Namibia’s financial sector.