Lights dim for Erongo RED

SHAREHOLDERS of Erongo RED want to dissolve the company, claiming that the financial affairs of the electricity distributor is in a ‘shambles’.

The shareholders on Tuesday unanimously adopted a position paper on the matter and postponed the Annual General Meeting (AGM) of the Erongo Regional Electricity Distributor (Erongo RED) to seek the approval from their individual municipal councils in the region to push ahead with the termination of the company.Walvis Bay, with 50 per cent, is the majority shareholder in Erongo RED, followed by Swakopmund with 28 per cent. Henties Bay, Omaruru, Arandis, Karibib, Usakos, Uis, NamPower and the Erongo Regional Council hold the rest of the shares.The news came on the same day that Erongo RED released figures to the media, saying it has poured more than N$225 million into local authorities’ coffers over the past five years, despite facing various challenges.In the position paper, compiled by Metcalfe Attorneys, shareholders complain about financial statements being ‘hopelessly late’ and claim that ‘nothing has been presented to the Auditor General as per regulations’. ‘The company is managed ineptly, incompetently and shareholders are purposefully and knowingly kept in the dark r.e. the affairs of the company,’ it alleges.The paper continues: ‘The result is that the shareholders who have not duly and timeously received annual financial statements since 2006 are expected to condone gross dereliction and neglect of the basic management of Erongo RED.’Furthermore, there has been no AGMs since August 2008, shareholders say. At the AGM which was scheduled for Tuesday but postponed, shareholders were supposed to consider and adopt financial statements for 2007, 2008 and 2009. No mention was made of the financials for 2010. According to the Companies Act, an AGM should be held within six months after the end of a financial year.Shareholders also claim that they have no proof that Erongo RED operates according to a business plan, and whether it is updated yearly as required by their agreement with the company.Local authorities also don’t have an electricity supply contract with Erongo RED, yet they are ‘forced to purchase electricity from a company with which it has not contracted and which enjoys no legislative sanction’.The position paper states that local authorities are under constant pressure from commercial and private consumers due to the exorbitant cost of electricity in the Erongo Region.’Such cost factors have seriously inhibited and restricted economic development and consequently job creation. The very existence of Erongo RED is certainly not in the public’s interest,’ it says.

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