LIH to withdraw from MobiPay

THE business arm of the National Union of Namibian Workers (NUNW), Labour Investment Holdings (LIH), has decided to withdraw from MobiPay, presumably because it has not received any returns on its investment in the company.

LIH also has in the meantime refused to sign surety for a bank loan MobiPay wanted to apply for at the Development Bank of Namibia. MobiPay would not comment on the matter, with director Amos Shiyuka emphasising that the two suspended LIH board members, Erongo governor Cleophas Mutjavikua and Deputy Minister of Labour and Social Welfare Alphäus Muheua, do not have any shareholding in MobiPay. The two were accused of having ‘blindly pushed’ for LIH to buy into MobiPay, which resulted in the LIH withdrawing from Nam-mic Financial Service Holdings which was considered the cash cow for the LIH, to enter into business with MobiPay. LIH had sold its 10 per cent shares in Nam-mic from which it got N$10 million, and bought into MobiPay for N$8 million. The current value of Nam-mic is close to N$440 million, confirmed the finance and administrative manager at Nam-mic, Michael Hennes. The ‘forced through’ deal with MobiPay is purportedly the reason why Mutjavikua and Muheua were suspended from the LIH board a week ago. ‘It is not possible for two board members out of eight to spearhead the sales of shares in a company even if they are so powerful,’ Mutjavikua hit back.Mutjavikua said the LIH board had deliberated on the deal with MobiPay for nine months. He said information regarding the MobiPay deal was provided to all board members, saying that those board members who fail to read their board packs now claim not to have been fully informed. LIH paid N$8 million for the MobiPay deal, which Mutjavikua said was paid off over four months to ensure MobiPay operates smoothly. ‘It is ‘false knowledge’ and it is not practical for one or two directors to push through a deal. The MobiPay deal and indeed the withdrawal from Nam-mic were done by the LIH board,’ he emphasised. He said the two letters sent to Nam-mic about LIH’s withdrawal from that company was done at a board meeting, which led to Connie Pandeni resigning from the LIH board. Mutjavikua then also resigned from the Nam-mic board to avoid a conflict of interest, as they were both board members of Nam-mic and LIH. ‘This was after the LIH board considered two products namely Cell Card (a product spearheaded by Nam-mic Financial Services), and MobiPay,’ he said. Only one LIH board member, David Namalenga, remained on both boards – Nam-mic and LIH – which Mutjavikua said posed a serious conflict of interest. Namalenga maintained he had not acted in conflict because there is no LIH board resolution to buy into MobiPay to begin with.But, according to Mutjavikua, Namalenga participated in LIH board discussions concerning disinvesting from Nam-mic, while he served on both boards.’I am a principled man, I am clean. I believe in good governance fully. Those who say there is a board resolution must come out and provide proof,’ said Namalenga. Nam-mic’s Hennes said the Nam-mic board was aware of Namalenga’s involvement in LIH, but that he [Namalenga] ‘at all times’ declared his interest. ‘From our side there was no conflict of interest,’ said Hennes.Despite these sentiments, the conflict of interest arises since Namalenga’s continued board position at Nam-mic might have influenced his decision regarding LIH’s withdrawal from Nam-mic. The current shareholders of Nam-mic are Capricorn Investment Holdings, Namibia Mineworkers Investment Holdings (the business arm of the Mineworkers Union of Namibia), Effort Investment Holdings (the business arm of Napwu), Nafau, Nantu, Natau, and the Namibia Farmworkers Union (Nafwu). Worth mentioning, said Mutjavikua, is that the Namibian market’s response to MobiPay was overwhelming. ‘Indeed, I am very proud that I brought a very good investment licensed by the Bank of Namibia to the LIH board for consideration,’ he said. ‘[We] can with confidence say that MobiPay is growing by the day and we are moving forward and remain focused on providing financial inclusion and efficient service delivery to all our loyal clients throughout Namibia,’ was all Shiyuka would say. In an attempt to justify LIH’s withdrawal from Nam-mic, Mutjavikua said that Nam-mic was not a ‘cash cow’ for his company as it is now being presented.’The amount received from the 10% investment in Nam-mic on average annually was not more than N$280 000 in dividends. How can such an amount be described as a cash cow?,’ he asked.Instead, LIH depended on other income lines to stay afloat, said the suspended board member.