NBC demands N$4m back from Rock Enterprises

THE NBC has demanded that production firm Rock Enterprises pay back close to N$4 million of the N$10,5 million it was paid, claiming that the film company overcharged the State broadcaster for over six months’ work.

The Namibian has learned that the NBC issued the claim when Rock Enterprises pressed that it be paid at least N$10 million after the national broadcaster cancelled a N$20 million a year programming deal. The programming contract, which was supposed to cover a five-year period, was cancelled less than 12 months after it was had been signed.Neither NBC nor Rock Enterprises were willing to comment yesterday except to confirm that the matter was being dealt with by their lawyers.It is the first time that the Namibian Broadcasting Corporation has suggested that Rock Enterprises did not deliver programmes worth the money it was paid.In July, the NBC told Rock Enterprises that it was cancelling the contract because of financial problems.The NBC had hit its overdraft limit of N$20 million, according to sources close to the corporation’s board of directors Sources told The Namibian that NBC completed an audit into the programmes it had bought from Rock Enterprises, which subcontracts international filmmakers Endemol to help put them together, and concluded that it should have paid not more than N$7 million.By July NBC had paid Rock Enterprises N$10,5 million.Rock Enterprises had then demanded that the NBC pay it out another N$10 million for halting a five-year contract that had yet to complete a year.The company also argued through their lawyers that NBC did not have the right to terminate the contract and asked that damages be paid in addition to other preferential treatment.”The senior management looked at the value of their programmes and it’s way less than the actual N$10 million that NBC paid them,” said a junior manager at the NBC.”In fact, they should be paying the NBC and not the other way round.We paid them an amount of money which is not equal to the product.”Rock Enterprises Managing Director Sebastian Kamungu has previously dismissed reports that his firm did not deliver better or more special programmes than the NBC could have produced in-house.He said their material for the NBC was expensive and superior because Rock Enterprises had hired Endemol, a world-renowned renowned Dutch company, to help produce the programmes.Kamungu yesterday declined to comment, saying he was meeting with his lawyers.NBC Chairman Uazuva Kaumbi also preferred to say nothing because a “legal process is going on”.The Namibian understands the NBC is willing to take the matter to court and have already hired senior lawyers to deal with it.Questions are already being asked within the State broadcaster how the NBC was drawn into such an expensive deal considering its precarious financial position.NBC’s monthly expenditure of N$13 million outstrips its revenue by N$5 million, despite an about 80 per cent Government subsidy.The NBC claimed the Rock Enterprises deal consumed a significant part of its money, but critics point to an extravagant staff complement and misleading “restructuring” which bloated the cost rather than trimming the spending.Sources told The Namibian a few months ago that the Office of the President had asked for an explanation surrounding the Rock Enterprises deal, raising questions whether individuals at the corporation benefited from it.The programming contract, which was supposed to cover a five-year period, was cancelled less than 12 months after it was had been signed.Neither NBC nor Rock Enterprises were willing to comment yesterday except to confirm that the matter was being dealt with by their lawyers.It is the first time that the Namibian Broadcasting Corporation has suggested that Rock Enterprises did not deliver programmes worth the money it was paid.In July, the NBC told Rock Enterprises that it was cancelling the contract because of financial problems.The NBC had hit its overdraft limit of N$20 million, according to sources close to the corporation’s board of directors Sources told The Namibian that NBC completed an audit into the programmes it had bought from Rock Enterprises, which subcontracts international filmmakers Endemol to help put them together, and concluded that it should have paid not more than N$7 million.By July NBC had paid Rock Enterprises N$10,5 million.Rock Enterprises had then demanded that the NBC pay it out another N$10 million for halting a five-year contract that had yet to complete a year.The company also argued through their lawyers that NBC did not have the right to terminate the contract and asked that damages be paid in addition to other preferential treatment.”The senior management looked at the value of their programmes and it’s way less than the actual N$10 million that NBC paid them,” said a junior manager at the NBC.”In fact, they should be paying the NBC and not the other way round.We paid them an amount of money which is not equal to the product.”Rock Enterprises Managing Director Sebastian Kamungu has previously dismissed reports that his firm did not deliver better or more special programmes than the NBC could have produced in-house.He said their material for the NBC was expensive and superior because Rock Enterprises had hired Endemol, a world-renowned renowned Dutch company, to help produce the programmes.Kamungu yesterday declined to comment, saying he was meeting with his lawyers.NBC Chairman Uazuva Kaumbi also preferred to say nothing because a “legal process is going on”.The Namibian understands the NBC is willing to take the matter to court and have already hired senior lawyers to deal with it.Questions are already being asked within the State broadcaster how the NBC was drawn into such an expensive deal considering its precarious financial position.NBC’s monthly expenditure of N$13 million outstrips its revenue by N$5 million, despite an about 80 per cent Government subsidy.The NBC claimed the Rock Enterprises deal consumed a significant part of its money, but critics point to an extravagant staff complement and misleading “restructuring” which bloated the cost rather than trimming the spending.Sources told The Namibian a few months ago that the Office of the President had asked for an explanation surrounding the Rock Enterprises deal, raising questions whether individuals at the corporation benefited from it.