Monday, March 4, 2024

Hollard scrambles to save Stanbic from fraud allegations

Hollard Insurance Company is scrambling to save Stanbic Bank Botswana from a case in which the insurer, the bank and the Non-Financial Bank Institutions Regulatory Authority (NBFIRA) are accused of fraud by a client. 

In a fresh and amended court papers before High Court’s Justice Tshepho Motswagole, Hollard argues that despite the fact that it was Stanbic that debited Meemo Mosupiemang’s account and despite the fact that Hollard Insurance as an insurance company, cannot debit his bank account with Stanbic, Mosupiemang has not joined Stanbic to the latest proceedings. 

“It is further submitted that the applicant intentionally and deliberately failed to join Stanbic because he knows that the in the event that he joined Stanbic to these proceedings, the answers and evidence which would adduced by Stanbic would defeat his application,” the insurance company argues. 

The matter arose from a dispute and accusations levelled against Hollard involving allegations of falsified records for the existence of a non-existent policy pf insurance covers to allegedly cover up for Stanbic by the insurance company. 

He had entered into vehicle loan agreement with Stanbic Bank on or around 8th Aug 2011. The agreement was that he would pay installment of P10 521. 73 for the first 12 months and subsequent installments of P7804.69 for the remainder of the loan contract 

The vehicle would remain the property of the bank until the loan was fully repaid. At the commencement of the deal, Mosupiemang is said to have authorized the bank to pay Hollard P30 763.98

After the lapse of the 1st policy, on or around the 30th Aug 2012, the bank allegedly on its volition debited his account with P26150.00 without authorization under the pretext of insurance.

He reportedly arranged his own cover and on the 30th Nov 2012 gave a cover note to Stanbic.

On the 18th April 2013, the bank again on its volition and without authorization allegedly debited his account with a further P30, 488.59 under the pretext of insurance without notifying him and contrary to the agreement. The motor vehicle was repossessed on the 15 November 2013 by the bank.  Hollard  reportedly denied the existence of covers and denied ever receiving payment except for the initial premium of P30 763.98 which was the cover he authorized. He said he was issued with a policy of 2011/2012 as the one and only ever undertaken with them on his behalf.

He then lodged a formal complaint about the alleged anomaly to the Bank and asked them through a series of letters to avail the policy documents and the bank failed but still maintained that the cover for P26 150 and P30 488.59 was taken with Hollard. 

Hollard reiterated that it was evident that it was Stanbic which debited Mosupiemang’s bank account with the amount of P26 150.00 and the amount of P30 488.59 in respect of the insurance premiums for the motor vehicle. 

“This is because both this Honourable Court and the Court of Appeal have handed down judgement against the applicant in proceedings where the applicants sued Stanbic and where the issues of the insurance and insurance premiums were central to those proceedings,” the insurance company also argued through its lawyers, Armstrongs Attorneys. 

It accused Mosupiemang of not disclosing those proceedings to Justice Motswagole. But Mosupiemang did not take the accusations lying down as he countered by arguing that the mention of the Stanbic Bank in his application was simply for the purposes of background and context. 

“It was not to says that any relief is desired against Stanbic. The 3rd respondent (Hollard) is simply attempting to shift blame from themselves due to the fact that it is clear that, Applicant suffered maladministration and fraud at the hands the 3rd respondent,” Mosupiemang’s lawyers Rockfall Lekgowe Law Group. 

The lawyers for Mosupiemang also argued that the matter with Stanbic involves breach of contract adding that “in this case, this cause of action is review of the decision of NBFIRA.” 

They argued in his case against Stanbic Bank, Hollard and NBFIRA were not cited as this was a totally different matter. 

“Additionally, the subject matter is not the same. In the other case, the case concerned the rights of the parties and alleged breaches under the loan agreement. In that case Hollard was not implicated or called upon to answer for anything. Notwithstanding whatever, breaches Stanbic may be liable for, that does not detract from the fact that Hollard under the relevant statutes is expected to act in a particular way,” Mosupiemang’s lawyers said. 

They said NBFIRA can be compelled to investigate and take the appropriate action adding that any decision by NBFIRA maybe thereafter be reviewed. 

“As such, we submit that the issues with Hollard and NBFIRA are very different from those in the Meepo v Stanbic Case. The court must also recall that, Hollard is not being accuses debiting the applicant’s (Mosupiemang” accounts wrongly or otherwise. In any event, even if we are wrong, it is worthy to mention that, the issues in the Meepo Mosupiemang vs Stanbic Bank Botswana have not been finally determined contrary to the 3rd respondent submissions,” the lawyers said. 

They said the judgement which was rendered “was only with regard to finding of the court a quo therein to grant absolution from the instance. An order of absolution does not finally decide the issue between the parties to the suit.” 

Turning to NBFIRA, Mosupiemang accused the regulator of abdicating its mandate as it failed to take action against Hollard despite the maladministration he had alleged in his complaint. 

NBFIRA had informed Mosupiemang that a letter written by one Mr Pelekekae who was at the time an employee of Hollard contained incorrect statements and that should he still have suspicions of fraud the matter should be reported to the Botswana Police Service. 

NBIFIRA said the difference in the statements made by Hollard to Mosupiemang did not amount to fraud but to inconsistences, which were reconciled in the investigation and the truth as to whether Mosupiemang was ensured was obtained from the investigation. 

“The inference that is drawn from the evidence placed before the First Repondent (NBIFIRA) is that the insurance cover was renewed for the period of 2012/2013 but was later cancelled under instruction of Stanbic Bank. Reversal of a transaction under the instruction of a client does not amount to fraud. Concrete evidence which could persuade and clearly prove that there was fraud was not found in the investigation,” the regulator argued through its lawyers Osei-Ofei Swabi & Co. 

The issue of Mr Pelekekae who in his response to the Applicant’s enquiries made an incorrect statement by stating that the Applicant was insured for the 2013/2014 peiod was referred to the Legal Department (for) further investigation; to find out what motivated his incorrect statement and what he could be charged with based on the findings that would follow. That investigation has not been completed owing to the current pending court proceedings,” NBFIRA stated. 


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