Another blow for Trustco

Trustco Group Holdings on Monday suffered its second blow in days after the JSE publicly censured the diversified Namibian company over its failure to inform shareholders timeously about the effects of a change in the terms of a loan linked to its CEO, Quinton van Rooyen.On Friday, the High Court of Namibia dismissed Trustco Bank Namibia’s (TBN) urgent interdict application for interim relief against the Bank of Namibia (BoN).In August, the BoN temporarily suspended TBN’s banking license with immediate effect and gave the institution six months to comply with the law or face subsequent consequences.Judge Boas Usiku ruled against the application filed by TBN, a subsidiary of Trustco Group Holdings, ordering the applicant to pay legal costs related to the matter.JSEThe Johannesburg Stock Exchange’s step pertains to Trustco’s controversial Huso loan.Van Rooyen had been the sole shareholder of a company ultimately acquired by Trustco in 2018, a diamond mining and exploration company, called Huso Investments, and had provided equity loans - or money invested as a shareholder. After this loan was changed to a liability, or money owed by Huso to Van Rooyen, it was waived.Trustco undertook to acquire Huso, which transaction shareholders approved in 2015 and 2017 respectively, based on Huso’s financial position that reflected an equity loan of N$295 million, the JSE said in a statement on Monday.In 2018, after the relevant shareholders' meeting, this was classified from equity loan to a liability, with the effect of changing Huso’s net asset value of N$92 million into a negative net asset value of N$240 million, the JSE said.Failure to disclose"The company did not disclose to shareholders and the market that the financial position of the entity it was acquiring had changed significantly from what was contained in the circular that shareholders had previously approved," the JSE said. "Such a significant change in the underlying financial position of the entity to be acquired was specific, precise and had the potential to influence the economic decisions of shareholders and investors," the bourse said.According to a judgement of the Financial Services Tribunal (FST) in South Africa, as of 2018, Van Rooyen had advanced a total of N$546 million in loans to Huso. This was then forgiven and reflected in Trustco's financials as profit.BattleAmong other issues, the JSE then informed Trustco it must restate its financials, sparking a battle, with its shares being suspended in November 2022. Trustco, however, ultimately conceded to restate the financials in February and its suspension was lifted in March.The reconsideration application was heard before the FST in June, with judgement handed down on Monday with Trustco's reconsideration application dismissed.BankWhen the central bank suspended TBN’s license in August, BoN governor Johannes !Gawaxab said: “The decision to suspend Trustco’s Bank’s license resulted from numerous non-compliance and serious shortcomings, of which several internal control weaknesses remain unresolved. This despite several repeated interventions by the bank [BoN] over an extended period directing Trustco Bank to rectify these shortcomings.”!Gawaxab said the decision was taken after consultation with the minister of finance and public enterprises, Iipumbu Shiimi.Group CEO of Trustco, Quinton van Rooyen, responded to Friday’s ruling, saying: “While disappointed by the urgency dismissal, Trustco always follows the rule of law.”“Trustco will always comply with any lawful and reasonable instruction from any regulator or higher authority. We will always oppose tyranny and unjust instructions. That is the DNA of Trustco. This saga remains far from over,” Van Rooyen said in a statement.Trustco has a dual-listing on the Namibian Stock Exchange (NSX). It closed at 80c per share on the Overall Index of the NSX on Monday. – Own report and Fin24

Another blow for Trustco

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Namibian Sun 2024-11-25

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Another blow for Trustco

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Namibian Sun 2024-11-25

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