The deputy minister of finance and public enterprises, Maureen Hinda-Mbuende, has questioned the awarding of a N$1,3 billion tender to a company that has a five-year-old as a majority shareholder.
The pharmaceutical medical supply tender was recently awarded to Cospharm Investment (PTY), a company with 51% ownership held by the child.
Cosmas Mukaratirwa, the father, owns the remaining 49% of the shares.
The government tender was awarded by the Central Procurement Board of Namibia to supply pharmaceuticals used in cancer treatment and psychotic disorders for a two-year period.
Hinda-Mbuende raised concerns about the moral implications of awarding a medical tender to a company with majority ownership by a minor.
She questioned the basis on which the father obtained power of attorney over the child’s shares and how the company’s board of directors was appointed given the majority shareholder’s minor status.
According to the law, a minor cannot own a business as children under the age of 18 are considered minors and do not pay taxes.
“It is very dubious in terms of principles when it suggests that you need 51% Namibian shareholding and you involve a child. This immediately raises moral questions. Deception should not be used to beat the system,” she emphasised.
Hinda-Mbuende also expressed concerns over child protection.
The Ministry of Finance and Public Enterprises sought legal opinion from the Office of the Attorney General regarding this matter last week.
Meanwhile, the decision to award the tender to Cospharm is being challenged in the High Court by businessman Shapwa Kanyama.
Cospharm was among 22 bidders initially not selected for the tender on 23 April.
They were disqualified for failing to initial next to an overwritten mistake in their bid and for not responding to the procurement board’s inquiries.
Mukaratirwa applied for reconsideration and the procurement board found merit in the application, as the bidding documents allowed bidders to either type or write their bids and any other documents included in the bid.
After the re-evaluation, it was discovered that Cospharm’s bid was the most economical in certain line items, leading to a re-allocation of awarded products.
This decision affected other bidders who had initially been allocated those products, but had offered higher prices than Cospharm. Earlier this month, the legal representative of Cospharm Investment said there is nothing untoward about a company with a five-year-old shareholder scooping a N$1,3-billion medical tender.
The contract will span two years.
The other shareholder is the child’s father, who owns 49%.
There is, however, no record of Cospharm Investment (PTY) Limited on the database of the Business and Intellectual Property Authority (Bipa).
Mukaratirwa, however, registered Cospharm Pharmaceutical CC in 2014.
He is also the sole member of the CC.
Mukaratirwa’s lawyer, Matilda Jankie-Shakwa, asked whether there was any limitation on the age of a shareholder in terms of the Companies Act.
“The shareholder is just an investor who invests in a company which does business. It’s not the person who runs the business or even makes the decisions.
“Any company will have a board of directors which makes decisions,” she said previously to The Namibian.
Jankie-Shakwa did not confirm whether the minor is indeed a shareholder.
In a previous interview, the procurement board spokesperson, Johanna Kambala, confirmed that the company was initially not selected for the tender as the bidder was disqualified from the evaluation process for failing to initial a correction.
She said the bidder applied for reconsideration and the board found that the reconsideration application had merits, as the bidding document makes provision for bidders to either type or write their bids and any other document included in the bid.
“As a result of these findings, the board directed the bid evaluation committee to re-evaluate Cospharm’s bid by taking into consideration the typed bid form, which was included in their bid.
“It transpired that Cospharm bid the cheapest in certain line items, and thus a reallocation of awarded products had to take place, affecting the bidders who were initially allocated those products, but who had offered more expensive prices than those of Cospharm,” said Kambala.