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Trustco, BON Clash Commences In High Court

By:Eba Kandovazu
The Bank of Namibia BoN) will have to explain itself to the Windhoek High Court why it failed to deliver the review record which was due to be done on 17 October. The central bank also did not oppose Trustco Bank Namibi’s (TBN) application to review some directives and decisions issued by the BoN in denying Trustco a full commercial banking licence.
This is according to a joint status report filed in the High Court.
The central bank applied to the High Court two weeks ago for TBN to be wound up.
A case management hearing was scheduled to be heard on 19 October in the High Court. However, the parties said they cannot proceed and have requested that the matter be postponed to allow for BoN to file the review record or report to the court on reasons for the absence of the record.
The attorney general, government as well as the minister of finance have also been cited as respondents and have filed their notice of intent to oppose the application.
It is reported that Trustco Bank and the Trustco Group are claiming that sections of the Banking Institutions Act of 1998 are unconstitutional as they violate the constitutional provision which prohibits unfair discrimination and Trustco Bank’s right to carry on its business.
Trustco alleges in a press release that during two years of correspondence and threats between them and the BoN, the central bank has denied its bank the opportunity to enter into full commercial banking operations, even after the group offered to capitalise the bank’s balance sheet by a further N$1 billion.
Trustco and its bank also claim that directives and decisions issued by the central bank were unconstitutional on several grounds.
The company further alleges that the central bank violates the constitution’s article guaranteeing equality before the law, as it only allows certain orders to be reviewed.
Trustco Group managing director Quinton van Rooyen says article 101 of the Constitution compelled the parliament to take into consideration economic growth when it enacted the Banking Institutions Act.
Their application calls on BoN to show cause why their final order issued on 25 July should not be reviewed and set aside. The central bank’s order was that Trustco, within 14 days, remove from office all the directors currently serving on its board.
Part B of Trustco’s application is a relief declaring that section 58(4) of the Banking Institutions Act is unconstitutional and setting it aside, declaring that sections 73A and 73B of the Banking Institutions Act are unconstitutional.

Eba Kandovazu

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