Staff Reporter
THE Namibia Financial Institutions Supervisory Authority (Namfisa) has been ordered by the Supreme Court to pay a total amount of N$35 million to the liquidator of a company, Prowealth Asset Management (PAM), that went bankrupt after defrauding investors.
The ruling on the amount to be paid to the liquidators, delivered on 21 May 2026, comes after an initial ruling delivered by the Supreme Court in November 2025, which found that Namfisa could be held liable for investors’ losses caused by fraud committed by the late Riaan Potgieter, the sole director of Prowealth Asset Managers (PAM), a Namfisa-registered asset manager.
It is alleged that Potgieter operated a fraudulent scheme and stole about N$75 million in investor funds by paying for the operating costs of Prowealth Asset Managers and enriching himself instead of investing the funds of the more than 70 people, most of whom were pensioners.
However, after several years, Prowealth’s liquidator, Alwyn van Straten, will be repaid a share of the stolen funds by Namfisa, giving hope of a financial remedy to those who were defrauded.
After Potgieter’s suicide in 2008 and PAM’s subsequent liquidation, the investors, along with PAM and its liquidator, sued Namfisa, alleging that it breached a statutory or common-law duty of care by failing to properly supervise PAM.
Acting Supreme Court Judge of Appeal Dave Smuts and Appeal Judge Hosea Angula upheld the appeal against a judgment delivered by the High Court, which had initially ruled in favour of Namfisa. The Supreme Court overturned the High Court judgment and stated that Namfisa is indeed liable for losses suffered by the investors of PAM.
In that ruling, Acting Judges of Appeal Dave Smuts and Hosea Angula said: “A reasonable supervisor of financial institutions would foresee the reasonable possibility of harm and loss to investors if asset managers are registered to do business without meeting the minimum requirements set as Namfisa’s conditions for registration, and that it was incumbent upon Namfisa officials to call upon Potgieter and PAM to meet that requirement.
“A reasonable regulator would have done so. The reasonable steps to be taken to avoid harm would have been to require that an independent auditor be appointed as a prerequisite to registration. There is no evidence of that being done,” the judges said.
On appeal, the parties agreed to separate the question of liability from quantum.
In the second phase of the appeal, the Supreme Court had to determine the quantum of the losses sustained by PAM, which were quantified at N$48 390 502 by one of its expert witnesses.
The calculation was challenged by Namfisa.
After taking into account the additions and deductions relating to the claims forming part of the liquidator’s claim, the Supreme Court ultimately determined the quantum of damages payable to the second appellant, van Straten, in the amount of N$35 111 583,04.
The amount is to be paid within 30 days of the Supreme Court judgment, with annual interest at a rate of 20% calculated from March 2022.
Picture for illustrative purposes only. Photo: File
