Bank BIC’s Dos Santos albatross

Bank BIC Namibia has confirmed that the perceived reputational risk of its main shareholder, Isabel dos Santos, has contributed to the bank’s failure to increase its local ownership, more than six years after being instructed to do so by the Bank of Namibia (BoN).Namibian Sun understands that ideally, it is Dos Santos’ stake in the bank that BoN wants to see reduced – in a bid to avoid another SME Bank-like debacle.Dos Santos’ assets have been frozen in various jurisdictions, including her native Angola, due to allegations of embezzlement and money laundering, claims she flatly denies.The SME Bank fell on its face in recent years, leading to its liquidation and job losses. Namibian authorities are walking the tight rope – on one hand trying to avoid a repeat of that liquidation while also avoiding rocking the boat against the daughter of the recently-deceased ex-Angolan president, whose armed forces fought shoulder-to-shoulder with Swapo combatants during Namibia’s liberation struggle.Reducing Dos Santos’ influence in the bank is seen as the safer option in avoiding the institution’s collapse.Local shareholding dreamOnce dubbed Africa’s richest woman, she has a 42.5% share in the bank through two entities she owns.When the Bank BIC got its banking licence from BoN in May 2016, one of the conditions was that it must have local shareholding, but six years later, nothing has changed in its structures.After missing the initial deadline, Bank BIC Namibia now has until June 2024 to have at least 45% local shareholding, a timeline which its CEO Lindsay Crawford said “will be achieved”.“With the adverse publicity both locally and internationally surrounding Ms Dos Santos, coupled with the perceived reputational risk involved, shareholders are actively pursuing a solution,” he said in his response to Namibian Sun.At least three government sources privy to the Bank BIC debacle have informed Namibian Sun that BoN has its hands full because of the bank’s failure to ensure local shareholding.“BoN does not want to replicate the mistakes made during the SME Bank tenure where the commercial bank was allowed to operate despite flouting some governance procedures, until it eventually went bust. It gave strict instructions, but the funny thing is that almost a decade later, nothing has changed and BoN is just idle,” an official said.According to another insider: “The bank got strict orders to take a proactive approach in order to protect depositors’ money as well as protect the reputation of the domestic banking industry”.UneaseNamibian Sun understands there is unease at the central bank over Dos Santos’ influence at Bank BIC, and now, it is pushing for the small unlisted bank to be independent and not “very much” linked to Banco BIC in Angola, despite the two entities being currently owned by the same shareholders.The central bank recently confirmed to Namibian Sun that it had indeed given instructions to Bank BIC, however, those requests have still not been heeded. “The bank is on record that it is aware of developments in Angola pertaining to Ms. Dos Santos. The bank is following these developments in the multiple jurisdictions as far as they may impact the operations of Bank BIC Namibia Limited,” BoN spokesperson Kazembire Zemburuka said last month while responding to media queries from this publication.Shares for friendsBank BIC Namibia shareholders have formed a solid alliance in various countries. Company documents show that the shareholders of EuroBic, Bank BIC Namibia and the Angolan Banco BIC are all the same people. Some of them are also business partners in other ventures, with Dos Santos as the common denominator.The shareholders of Bank BIC Namibia are Finisantoro Holdings (Pty) Ltd with 17.5%; Santoro Financial Holdings with 25%, and Fernando Mendes Teles with 20%.Telegast BV holds 17.5% shareholding while Luis Manuel Cortez dos Santos, Manuel Pinheiro Fernandes and Sebastiao Bastos Lavrador each have 5% shareholding. The remaining 5% is held by ‘other shareholders’.Finisantoro Holdings and Santoro Financial Holdings are, in turn, wholly-owned by Dos Santos. With a combined shareholding of 42.5% in Bank BIC Namibia by the two legal entities, she is essentially the single biggest shareholder in the bank.Long list of troublesDos Santos’ troubles began in 2017 when her father, late Jose Eduardo Dos Santos, stepped down from the Angolan presidency. She has since been accused of “money laundering, influence peddling, harmful management” and “forgery of documents, among other economic crimes” during her stint at the state oil firm Sonangol.The future of Bank BIC Namibia has also been in question since Dos Santos’ troubles started in Angola, especially after she decided in 2020 to sell her 42.5% shares in Eurobic in Portugal.Eurobic is controlled by Dos Santos’ long-time business partner Fernando Teles. Teles is a 20% shareholder in Bank BIC Namibia, according to the bank’s 2020 financials.In 2016, the suitability of Dos Santos, with 42.5%, was evaluated by the Bank of Portugal, in a process that involved the European Central Bank.Portugal’s banking regulator said at the time that: “EuroBic is being evaluated, namely the operations revealed by Luanda Leaks in which the bank participated. The suitability of shareholders should be reassessed in light of the ongoing assessment of the Luanda Leaks revelations. “It is necessary to verify the control mechanisms of these operations and if there were defects and [of] what nature”.Asked whether Dos Santos has indicated that she plans to dispose of her interests in Bank BIC Namibia, Crawford responded: “We cannot comment on any proposed action by Ms Dos Santos. As far as I am aware, she has never visited the bank in Namibia and local operational management have never met with her or even spoken to her. This is an issue for shareholders to discuss”.BoN’s worriesOver the past few weeks, BoN has been economical with the full details surrounding Bank BIC’s shareholding status, and with the SME Bank ghost still haunting the central bank, it remains to be seen what measures it will implement to avoid the same mistakes.BoN deputy governor Ebson Uanguta, addressing media editors recently, said Bank BIC has three years to ensure that by then it should have local shareholding.“The bank is in the spotlight but it’s not because it’s not meeting its prudential standards in terms of capital and liquidity ratio. The only challenge is with regards to one of the major shareholders, Isabel dos Santos. We knew very well when we licenced that bank, we put very clear requirements on how they need to transition to become a locally-owned bank,” he said.But because banks take time to become profitable, Uanguta explained: “I think up to this stage, Bank BIC has not reached profitability, which is a challenge in terms of attracting local shareholders”.The bank, according to him, subsequently applied for an extension, which BoN then granted.Uanguta revealed that “there are people who have expressed interest [to buy into the bank] and we are busy evaluating their applications”. Potato bankingNicknamed ‘The Princess’ in Angola, Dos Santos amassed her fortune thanks to her web of business interests, spanning over 400 companies in multiple sectors. Her business network ranges from energy, financials, real estate, telecommunications, engineering, banking, insurance, petroleum, electricity, mining, retail, transportation and media.She owns some of the companies with her late husband Sindika Dikolo, who died in October 2020. Malta is a popular business destination for the power couple.According to a probe by the International Consortium of Investigative Journalists, 14 of her companies are registered in Malta, a tax haven of note due to its low tax rates for foreign firms.One of those 14 companies is Finisantoro Holdings, the company that has a 17.5% stake in Bank BIC Namibia.The company was registered in Malta by Dos Santos and Dikolo in 2014, less than a year before the establishment of Bank BIC Namibia.Malta not only has close ties with Dos Santos’ businesses, its bilateral ties to Namibia are also solid - dating back to Namibia’s pre-independence era.When the Maltese government in August 2020 donated 500 tons of potatoes valued at N$3.3 million to Namibia in order to assist those who have been affected by the drought and the Covid-19 pandemic, that country’s foreign minister Evarist Bartolo recalled that that country was among the first to back independence for Namibia and to support Namibians by awarding numerous scholarships to them.“The generous donation Namibia received from Malta is another milestone in the history of the two countries’ friendly bilateral relations, which both would like to enhance, especially in the areas of education, trade and investment,” Bartolo said at the time.

Bank BIC’s Dos Santos albatross

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Namibian Sun 2024-11-18

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Bank BIC’s Dos Santos albatross

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Namibian Sun 2024-11-18

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