August 26 bosses guilty over N$2,5m payment

Karel Nel

A disciplinary hearing has found suspended August 26 logistics managing director Salatiel Ntinda and the company’s finance manager, Karel Nel, guilty of paying N$2,5 million of taxpayers’ funds to a private entity without authorisation.

August 26 Logistics is owned by the Ministry of Defence and Veterans Affairs.

Disciplinary hearing documents show that the payment to Penda Enterprises was made on 24 May this year.

The two were subsequently suspended, which paved the way for a disciplinary hearing that was concluded last Monday.

“The employee [Ntinda] is guilty of failure to act in good faith and in the best interest of the employer and is guilty of misappropriation of his employer’s funds,” notes document seen by The Namibian.

Ntinda pleaded not guilty to all charges.

He was found guilty of assisting a third party to misappropriate August 26 Logistics.

The duo appeared before a disciplinary hearing chaired by lawyer Clement Daniels.

Daniels said there is no evidence regarding the role of Penda Enterprises in the misappropriation of August 26 Logistics funds.

“The facts are that Penda Enterprises applied for a loan and was granted a loan by August 26 Logistics. Whether or not the employees and directors of the board complied with their internal fiduciary duties are immaterial to Penda Enterprises. It can, therefore, not be said that Penda Enterprises misappropriated funds and that the employee assisted therein [Ntinda].”

The hearing found Ntinda guilty on three charges, while Nel was also found guilty of charges.

The disciplinary process found Ntinda not guilty of assisting the third party to misappropriate August 26 Logistics.

The document shows advocate Tuhafeni Muhongo, who represented August 26 Logistics in the matter, indicated that two charges would not be put to the witness.

Ntinda and Nel were suspended in June this year, after it was reported that August 26 Logistics lost N$2,5 million in a questionable loan deal, which was allegedly transferred from the company’s accounts without board authorisation.

According to the disciplinary hearings documents, in May this year, Ntinda, without the authorisation or permission of the board of August 26 Logistics, concluded an agreement with Penda Enterprises, which was later paid N$2,5 million from August 26 Logistics.

Prior to the payment, August 26 Logistics received a request for financial assistance in the amount of N$2,5 million from Penda Enterprises.

The request came on 18 May 2023, documents show.

“The request was directed to chairperson Petrus Nathinge. On 23 May 2023, August 26 Logistics and Penda Enterprises entered into a joint venture agreement wherein August 26 Logistics undertook to advance a loan to Penda Enterprises in the amount of N$2,5 million,” the document shows.

On 24 May, Ntinda received a letter from Nathinge in which Ntinda was allegedly instructed to transfer an amount of N$2,5 million to Penda Enterprises.

Nathinge is also the deputy executive director of the Ministry of Defence and Veteran Affairs.

Ntinda allegedly requested Nel to load the payment for release. However, Nel is said to have reported the transaction to the board as he “was not comfortable with it”.

Five days later, Nathinge called an extraordinary meeting of the board of directors.

At this meeting, the documents show the board allegedly ordered an acknowledgement of debt and surety agreement be entered with Penda Enterprises to ensure the repayment of the loan. The employee and Nel were subsequently suspended pending an investigation into their conduct.

Daniels said Ntinda denied his actions to enter into the joint venture with Penda Enterprises. Instructing Nel to load the payment and making the payment to Penda Enterprises was within the scope of his employment and he was instructed by the board chairperson to execute the instruction.

He further contended that he did not act outside the scope of the employer’s business and acted at all times in good faith and in the interest of his employer.

Ntinda justified his decision to authorise the payment, saying his decision received written instructions from Nathinge, that was marked “secret” and that he was not authorised to disclose it to third parties, including other board of directors.

“He [Ntinda] did not obtain prior board approval because he thought it was not necessary,” Daniels said in the documents.

In his affidavit, Ntinda said the decision by the board of August 26 Logistics to suspend him is unlawful as he was not given an opportunity to make representations as to why he should not be suspended.

He also said the meeting lacked the quorum as provided for by the shareholders agreement of August 26 Logistics.

“A quorum of meetings of the board of directors will consist of at least five directors. At the meeting held on 5 June 2023, the directors present were only four,” he said.

He said after his suspension, he faced seven charges which were exaggerated, stretched and “seemingly a mountain made out of a molehill”.

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