Capricorn defends Nuyoma's appointment

Capricorn Group Limited has defended the appointment of former Government Institutions Pension Fund (GIPF) CEO David Nuyoma, who is set to take the reins at Namibia’s only home-grown bank amid concerns that there may be a conflict of interest.

GIPF acquired a 26% stake in Capricorn in 2017, while Nuyoma was the pension fund’s CEO.

Its investment in Capricorn also accounts for one of the highest investments in a listed entity on the Namibia Stock Exchange (NSX), second only to MTC where it holds a 29% stake - currently valued at N$1.7 billion.

This has subsequently raised concerns amongst members of the public, with claims that the appointment could be a token of thanksgiving for the pension fund’s investment.

‘Not linked’

The local banking group broke the news of Nuyoma’s appointment on Wednesday, following his retirement from GIPF earlier this year.

“The appointment of Mr Nuyoma as group CEO of Capricorn Group is in no way linked to the acquisition by GIPF of a 25% shareholding in Capricorn Group. In 2017, following an increase in the minimum local asset requirements for pension funds, GIPF needed quality local investments,” Capricorn executive spokesperson Marlize Horn explained.

According to her, the board of trustees of GIPF - not its CEO - approached shareholders of the NSX-listed Capricorn Group at the time with a proposal to acquire shareholding in the group.

Horn maintained that Nuyoma played no active part in the decision-making involved in GIPF making an investment in Capricorn.

“The board of trustees of GIPF approved the investment in Capricorn Group after conclusion of their governance process, which included assessments and due diligences performed by the GIPF-appointed advisory panel of independent investment bankers, legal advisors, risk consultants and financial advisors,” she said.

Not a concern

Capricorn said GIPF’s shareholding in the home-grown banking group was not an issue of concern, since it also held significant shareholding in other banking institutions.

A glance at GIPF’s annual report for 2022 shows that it held a 26% stake in Capricorn - valued at N$1.9 billion; a 16% stake in First Rand, owners of First National Bank [FNB] Namibia, valued at N$1.2 billion; a 6% stake in Standard Bank Namibia valued at N$157 million, and a 3% stake in Letshego Namibia, valued at N$33 million.

“It should be noted that GIPF is also a substantial shareholder in FNB, Standard Bank and Letshego Bank. As far as the recruitment of Capricorn Group’s CEO is concerned, a transparent process was conducted in full and strict compliance with the policies and governance rules of the Capricorn Group.

“There is therefore absolutely no basis for any concerns around potential conflict of interest with the appointment of Mr Nuyoma,” Horn said.

No involvement

Despite GIPF’s significant shareholding in Capricorn, Nuyoma took no part in the strategic decision-making of the banking group, Horn stressed.

“The board of Capricorn Group sets the strategic direction for the business and not the shareholders. Strategic actions and decisions are executed by management of Capricorn Group, with oversight by the Capricorn Group board."

“The CEO of GIPF, who was never a director of Capricorn Group and who had no involvement whatsoever with the management of Capricorn Group, could therefore not influence the strategic decision-making of Capricorn Group,” the spokesperson added.

Efforts to engage Nuyoma and the chairperson of the GIPF board of trustees, Mihe Gaomab II, proved futile at the time of going to press.

Nuyoma is set to assume duty on 1 March 2024, pending regulatory approval.