By Timo Shihepo
12 August 2024
Several individuals and entities could face criminal charges after directors in the National Petroleum Corporation of Namibia (Namcor) fired managing director Immanuel Mulunga last week.
The previous Namcor board of directors reportedly filed charges under the Prevention of Organised Crime Act involving fuel supply and construction of facilities for the Namibian military, according to sources close to the case.
Namcor spokesperson Utaara Hoveka yesterday said the matter was under investigation.
“As the matter in question is under investigation, we cannot comment on its specifics. We remain committed to maintaining the integrity of the legal process and to ensure justice is served fairly,” he said.
The Office of the Prosecutor General did not respond to questions sent to it yesterday.
Namcor has already taken steps to shut down two of the companies jointly owned by the defence force and a family called Elindi, accusing them of fraudulent business transactions and failure to pay the state oil supplier for fuel products.
The companies Enercon and Erongo Petroleum owe Namcor N$380 million.
Mulunga was summarily dismissed on Thursday, within 48 hours of retired judge Gerhard Maritz’ ruling against Namcor’s board, which had accused Mulunga of fraud by failing to disclose crucial information to the directors, as well as breaching the trust of the working relationship.
The case is related to Mulunga paying US$6,7 million (N$123 million) on behalf of foreign entities that failed to meet its requirement in a joint investment aimed at an oil exploration and extraction project in Angola.
Mulunga apparently won the case by successfully showing that the board had given him sweeping powers to do everything necessary to ensure the oil project was successful.
The board had argued that it never intended to provide Mulunga carte blanche in signing off and committing Namcor to a project with financial implications of over N$8 billion, as a company that relies heavily on taxpayer funding.
Having lost that case, the board called an emergency meeting on Thursday and moved to Plan B by firing Mulunga, apparently on the basis that the transactions involving Enercon and Erongo Petroleum amount to dismissable offences, according to people close to the board.
“The board of directors of Namcor, at its meeting held on 8 August, deliberated on an ongoing case of misconduct relating to the unauthorised asset acquisition by the suspended managing director, Mulunga,” stated the board in a notice.
Mulunga yesterday told The Namibian the dismissal is illegal and unfair.
Mulunga confirmed that he and his team have made a decision regarding his next step.
“Yes, we are going to respond. It’s unheard of. It was clearly pre-meditated in the event I was going to be found not guilty,” he said.
THE MILITARY CONTRACTOR AFFAIR
Mulunga’s termination letter, which was hand-delivered to him on Thursday, details his alleged fraud and alternative gross negligence.
Mulunga, as Namcor’s managing director, led the deal to buy Enercon, which has a decades-long agreement with the Namibian Defence Force (NDF) to supply the military’s fuel needs, as well as renovate its oil storage facilities.
“On 8 July 2022, you approved a recommendation from Olivia Dunaiski for Namcor to take over assets of Enercon at the costs of N$53 million in circumstances you knew, or ought to have known, or negligently failed to establish that, it had not been established whether Enercon was the lawful owner of the said assets,” Mulunga’s termination letter reads.
Dunaiski is a former commercial manager at Namcor who is now employed by Erongo Petroleum, a company that Namcor wants to liquidate over unpaid debt.
It is alleged that Enercon pretended to be selling the facilities, which it never owned, in addition to the oil supply contract.
“The internal valuation of the assets that was conducted by Nestor Sheefeni and Michael Aipanda was a sham, as there was no indication in that purported valuation that Sheefeni and Aipanda were duly qualified and registered with the Engineering Council of Namibia to carry out such valuation,” notes the termination letter.
Sheefeni is the executive of engineering and technical services, and Aipanda is the manager of engineering and technical services.
Mulunga was accused of pushing for the purchase by having Namcor pay at least N$53 million to Enercon without conducting a due diligence process to ensure the state fuel company was getting value for its money.
“Payment of N$53 million to Enercon for the assets would have no benefit for Namcor, as there was no contract between the defence ministry and Namcor to supply petroleum products to the defence ministry,” the termination letter notes.
It added: “There was no lease agreement, nor was any lease agreement proposed between Enercon and Namcor for Enecorn’s use of assets in supplying products to the defence ministry.”
The board said the price indicated for the purchase of the assets of N$53 million exceeded Mulunga’s level of authority.
“You did not inform the board of directors of Namcor of the purchase of the assets,” notes the termination letter.
The transaction collapsed, but Namcor has struggled to recover the money. Namcor has also been selling fuel to the military entities at high credit lines that led to its cash flow problems and technical insolvency.
The government has since given a N$1,2 billion bailout to Namcor.
