Agribank sues to evict Witvlei Meat

By: WERNER MENGES

ONE of Namibia’s major producers of export meat, Witvlei Meat, is locked in a legal battle with the Agricultural Bank of Namibia over the abattoir that has been the company’s base for almost seven years.

In a case heard in the High Court in Windhoek last week, the Agricultural Bank has asked the court to order that Witvlei Meat should be evicted from the abattoir which it has been leasing from the bank at Witvlei since August 2006.
Witvlei Meat is fighting the case.
The Agribank is claiming that Witvlei Meat’s lease for the abattoir has expired and that the company has no legal right to still occupy the premises belonging to the bank. Witvlei Meat’s occupation of the abattoir is unlawful, and in the circumstances the Agribank is entitled to evict the company from the premises, the bank’s chief executive officer, Leonard Iipumbu, says in an affidavit filed with the court.
Witvlei Meat is disputing Iipumbu’s claims. The company is claiming that it has exercised an option to buy the abattoir at a price of N$15 million, but that the bank is refusing to keep its side of that deal, which was part of the initial lease agreement which Agribank and the company concluded on August 1 2006.
Judge Dave Smuts reserved his judgement after hearing arguments on the matter on Thursday. He indicated that he would try to deliver his judgement by April 12.
The abattoir at Witvlei has a chequered history. It was built by the ill-fated !Uri !Khubis Abattoir (Pty) Ltd, which went bankrupt in July 2004.
The Agribank was one the major financiers of !Uri !Khubis Abattoir, having lent the company about N$50 million to build its abattoir.
After !Uri !Khubis had gone into liquidation, the Agribank bought the abattoir for N$11 million, Iipumbu says in an affidavit forming part of the court record in the bank’s case against Witvlei Meat.
In the lease agreement signed by Iipumbu and the chairperson of Witvlei Meat’s board of directors, Sidney Martin, it was agreed that the bank would lease the abattoir to Witvlei Meat for a two-year period, at a monthly rent of N$62 500.
A key part of the agreement was that Witvlei Meat would have an option to buy the abattoir from the bank for N$15 million during the two-year duration of the lease, Iipumbu has informed the court.
The lease agreement was renewed for a further two years starting from August 1 2008. With the renewed lease, Witvlei Meat no longer had the option to buy the abattoir for N$15 million, Iipumbu is claiming.
However, Witvlei Meat is claiming that an exclusive option to buy the abattoir remained part of the renewed lease agreement, in which the two-year lease was extended on the same terms and conditions as in the initial lease.
In Witvlei Meat’s view, it could exercise its option to buy the abattoir any time before the renewed lease period ran out, which was by the end of July 2010.
In August 2009, the company made an offer to the bank to buy the abattoir for the amount of N$15 million mentioned in the first lease agreement.
The bank’s board considered the offer in January 2010 and agreed to offer to sell he abattoir to Witvlei Meat at that price. First, though, Iipumbu addressed a letter to the minister of finance and the minister of agriculture, to request their approval for the proposed transaction.
Only by the end of May 2011 did the minister of finance inform the bank in a letter that the Cabinet has directed that the abattoir should be offered to Witvlei Meat at a market-related price.
That price, Iipumbu claims, is about N$40,5 million, according to a valuation of the abattoir that was done.
Again, Witvlei Meat does not agree.
According to the company’s managing director, Hendri Badenhorst, it was costing the bank N$300 000 a month just to maintain the abattoir before Witvlei Meat started to lease the premises. The bank has been saving N$3,6 million a year just on those costs through Witvlei Meat’s lease of the abattoir, he is arguing in an affidavit also filed with the court.
Badenhorst further claims that Witvlei Meat has invested more than N$20 million to improve and upgrade the abattoir to a standard acceptable for export to Europe.
If Witvlei Meat did not have an exclusive right to buy the abattoir it would never have taken the risk of investing so much in it, Badenhorst states. The purchase price for the abattoir remains as it was set in the initial lease agreement, Badenhorst is also arguing.
“The conduct of the (Agribank) amount to nothing but bullying tactics in an attempt to force (Witvlei Meat) in a further lease,” Badenhorst charges.
Iipumbu is denying this. Witvlei Meat’s option to buy the abattoir has expired, and it now has no right or title to occupy the premises belonging to the bank, he states.
Agribank was represented by senior counsel Thomas Bokaba and Sisa Namandje in the hearing before Judge Smuts. Andrew Corbett, instructed by Hanno Bossau, represented Witvlei Meat.

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