Shareholders to suffer no losses in N$9 million share theft
Written by on May 15, 2024
The Namibian Stock Exchange (NSX) says shareholders will not suffer any losses from the recent fraudulently transfer of shares at the stockbroking firm, Simonis Storm Securities.
Earlier this week, it was reported that an ex-employee of the firm fraudulently sold or transferred ownership of shares worth close to N$9 million belonging to Simonis Storm clients.
NSX chief executive Tiaan Bazuin says shareholder interests are secure despite an ongoing investigation.
“The case in question is still under investigation, so I cannot share a lot of detail, however, no shareholder would suffer any loss,” he says.
According to Bazuin, there are guarantee funds designed to protect shareholders from any losses due to market improprieties.
He says there have been rising cases of identity theft, prompting the need for advanced verification systems.
“We need biometric systems to be able to check back to a central database such as home affairs to make sure the people we deal with as clients are who they say they are,” says Bazuin.
The current case underscores the critical importance of a central securities depository (CSD), an electronic share register linked to banking payment systems, he adds.
“This case also makes clear why a CSD is so crucial to our market to eliminate risks of funds being diverted.”
Earlier this year, the Namibia Financial Institutions Supervisory Authority (Namfisa) issued the CSD licence, marking a key step toward enhanced market security.
“Implementation thereof is a priority,” says Bazuin.
CSDs act as the backbone of securities transactions. They ensure smooth settlements by guaranteeing simultaneous delivery of securities and payment (delivery versus payment), safeguarding both buyers and sellers.
Additionally, CSDs manage the securities after ownership is transferred.
According to Namfisa, the capital market industry in Namibia is valued at N$251 billion and the CSDs will foster growth in the industry.
“By facilitating seamless digital transactions and replacing paper-based securities with secure digital records, the CSD is primed to catalyse innovation while fortifying the overall stability of Namibia’s financial system,” says Namfisa spokesperson Victoria Raimond.
This comes after Simonis Storm opened a criminal case against a former employee of the firm, Liaan de Kock, for fraudulently selling client shares worth N$9 million.
De Kock allegedly transferred shares to a client without approval and sold shares from another client’s account without their knowledge.
The money from the sales was deposited into an account belonging to Connie van Tonder.
De Kock is also suspected of receiving payments from Van Tonder’s account.
The firm is taking legal action against De Kock, his wife, and Van Tonder.
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