Govt assets sold for peanuts

THE Namibian Development Corporation (NDC) lost the State millions when it sold off Amalgamated Commercial Holdings (Amcom) businesses at grossly reduced prices.

The Presidential Inquiry into the collapse of the Development Brigade Corporation and Amcom heard yesterday that politicians and businessmen appeared to treat Amcom as the equivalent of a bargain basement, while purported buyers ‘looted’ assets freely. Former Ministry of Trade and Industry Hidipo Hamutenya, who ordered the sale of the companies, and Trade Permanent Secretary Andrew Ndishishi are among those implicated as having acted improperly in the sale of at least two of the more than 30 businesses the NDC sold for a song.In most cases, the NDC committee responsible for selling the Amcom commercial entities in 2001 did not bother to determine the real value of businesses before selling them.These findings are contained in an independent forensic audit of Amcom carried out by Faniel Kisting at the express request of the commission.Over the last two days, Kisting has produced lengthy testimony from a hefty document detailing alleged gross irregularities leading to Amcom’s demise.According to his findings, most Amcom businesses were sold without complying with the NDC’s financial procedures of advertising the sales and inviting tenders.Furthermore, the committee often did not accept the highest bid for the companies.This was the case with Ondangwa Hardware, which was sold for N$2 million – N$500 000 less than the highest bid received.The new owners failed to even pay a deposit for the business, and by the time they abandoned the business, had cost the NDC a further N$1,2 million in assets stolen.The NDC did not take legal action against them or many of the buyers who occupied business premises, sold the stock and took the assets, without paying a single cent towards buying the property.Kisting said even if there were no assets to attach, at the very least fraud charges could have been laid against the culprits.This never happened.Within only a few months of being sold, most of the Amcom businesses collapsed, were repossessed and had to be resold by the NDC.Even after reselling them, many never continued with the original business and Amcom employees lost their jobs.The forensic audit points to Hamutenya as having played a role in reducing the price of at least one business – the Katima Hardware Store.According to Kisting’s testimony, Okapana Holdings approached Hamutenya when it could not come up with the N$1,2 million it agreed to pay the Offshore Development Company (ODC) for the store.Hamutenya then instructed the ODC’s CEO, Sattar Aboobakar, to lower the price to N$650 000.”The fact that the price was dropped is highly irregular and should be explained by the persons concerned,” Kisting told the commission.Okapana Holdings could not come up with the reduced amount either, and later the business was sold to an original bidder for N$650 000.The report also implicates Ndishishi as having unfair involvement in aiding Kavango Empowerment Company to buy the Rundu Hardware and Furniture Store.Ndishishi had a shareholding of 3,64 per cent in the empowerment group through the company Kula Investments of which he, Secretary to Cabinet Frans Kapofi, businessman John Walenga, Nedbank CEO Martin Shipanga and NPC Director Immaneul Ngatjizeko are all directors.The NDC had originally received a higher bid than the N$1,4 million that the Kavango Empowerment Company offered for this business.When the Kavango Empowerment Company struggled to come up with the money by last year, Ndishishi wrote to Aboobakar, saying he was “disappointed” that the NDC had not helped the company with a loan .He suggested that the money be granted from the Ministry of Trade’s Feasibility Study Fund at no interest.The report could not verify whether Ndishishi declared his interests at the time.Kisting said yesterday that the money available in the fund (N$1,5 million) was only sufficient to cover this particular loan and that it appeared “there was never the intention to assist any other buyers from this fund”.The commission further heard yesterday that even though Amcom employees and the previously disadvantaged were supposed be the first to benefit from the sale of the Amcom companies, this mostly did not happen.In some instances the buyers who signed the final deeds of sale were not the same people who were awarded the bid by the committee, as in the case of Opuwo Powersave, but the committee allowed the transaction to proceed anyway.In the sale of the Okatana Filling Station at Oshakati, the NDC incurred debts of N$1,4 million because of breach of contract with the buyer and today the petrol station is abandoned and the matter unresolved.SOME OF THE BUSINESSES SOLD UNDER VALUE BY THE NDC VALUE SOLD FOR 1.Oshakati Hardware………………..N$6 million…………..N$2 million 2.Oshakati Bread Factory…………N$885 000…………..N$500 000 3.Ondangwa Hardware…………….N$3,2 million………..N$2 million 4.Opuwo Powersave…………………N$ 807 000………….N$600 000 5.Eagle Mills……………………….never established…………N$1,5 million 6.Rundu Hardware……………………N$1,9 million………..N$1,5 million 7.Katima Hardware…………………..N$1,2 million………. N$650 000 8.Katima Wood Factory……………N$5,2 million……….N$2,1 million (* Values as determined by the forensic auditor)—–Former Ministry of Trade and Industry Hidipo Hamutenya, who ordered the sale of the companies, and Trade Permanent Secretary Andrew Ndishishi are among those implicated as having acted improperly in the sale of at least two of the more than 30 businesses the NDC sold for a song.In most cases, the NDC committee responsible for selling the Amcom commercial entities in 2001 did not bother to determine the real value of businesses before selling them.These findings are contained in an independent forensic audit of Amcom carried out by Faniel Kisting at the express request of the commission.Over the last two days, Kisting has produced lengthy testimony from a hefty document detailing alleged gross irregularities leading to Amcom’s demise.According to his findings, most Amcom businesses were sold without complying with the NDC’s financial procedures of advertising the sales and inviting tenders.Furthermore, the committee often did not accept the highest bid for the companies.This was the case with Ondangwa Hardware, which was sold for N$2 million – N$500 000 less than the highest bid received.The new owners failed to even pay a deposit for the business, and by the time they abandoned the business, had cost the NDC a further N$1,2 million in assets stolen.The NDC did not take legal action against them or many of the buyers who occupied business premises, sold the stock and took the assets, without paying a single cent towards buying the property.Kisting said even if there were no assets to attach, at the very least fraud charges could have been laid against the culprits.This never happened.Within only a few months of being sold, most of the Amcom businesses collapsed, were repossessed and had to be resold by the NDC.Even after reselling them, many never continued with the original business and Amcom employees lost their jobs.The forensic audit points to Hamutenya as having played a role in reducing the price of at least one business – the Katima Hardware Store.According to Kisting’s testimony, Okapana Holdings approached Hamutenya when it could not come up with the N$1,2 million it agreed to pay the Offshore Development Company (ODC) for the store.Hamutenya then instructed the ODC’s CEO, Sattar Aboobakar, to lower the price to N$650 000.”The fact that the price was dropped is highly irregular and should be explained by the persons concerned,” Kisting told the commission.Okapana Holdings could not come up with the reduced amount either, and later the business was sold to an original bidder for N$650 000.The report also implicates Ndishishi as having unfair involvement in aiding Kavango Empowerment Company to buy the Rundu Hardware and Furniture Store.Ndishishi had a shareholding of 3,64 per cent in the empowerment group through the company Kula Investments of which he, Secretary to Cabinet Frans Kapofi, businessman John Walenga, Nedbank CEO Martin Shipanga and NPC Director Immaneul Ngatjizeko are all directors.The NDC had originally received a higher bid than the N$1,4 million that the Kavango Empowerment Company offered for this business.When the Kavango Empowerment Company struggled to come up with the money by last year, Ndishishi wrote to Aboobakar, saying he was “disappointed” that the NDC had not helped the company with a loan .He suggested that the money be granted from the Ministry of Trade’s Feasibility Study Fund at no interest.The report could not verify whether Ndishishi declared his interests at the time.Kisting said yesterday that the money available in the fund (N$1,5 million) was only sufficient to cover this particular loan and that it appeared “there was never the intention to assist any other buyers from this fund”.The commission further heard yesterday that even though Amcom employees and the previously disadvantaged were supposed be the first to benefit from the sale of the Amcom companies, this mostly did not happen.In some instances the buyers who signed the final deeds of sale were not the same people who were awarded the bid by the committee, as in the case of Opuwo Powersave, but the committee allowed the transaction to proceed anyway.In the sale of the Okatana Filling Station at Oshakati, the NDC incurred debts of N$1,4 million because of breach of contract with the buyer and today the petrol station is abandoned and the matter unresolved. SOME OF THE BUSINESSES SOLD UNDER VALUE BY THE NDC VALUE SOLD FOR 1.Oshakati Hardware………………..N$6 million…………..N$2 million 2.Oshakati Bread Factory…………N$885 000…………..N$500 000 3.Ondangwa Hardware…………….N$3,2 million………..N$2 million 4.Opuwo Powersave…………………N$ 807 000………….N$600 000 5.Eagle Mills……………………….never established…………N$1,5 million 6.Rundu Hardware……………………N$1,9 million………..N$1,5 million 7.Katima Hardware…………………..N$1,2 million………. N$650 000 8.Katima Wood Factory……………N$5,2 million……….N$2,1 million (* Values as determined by the forensic auditor) —–