Treasury seeks to reverse N$20m bar deal

20 October 2017 Author   Sonja Smith
Finance Minister, Calle Schlettwein, is leading an inquiry into how the Business and Intellectual Property Authority (BIPA), through the Ministry of Industrialisation, Trade and SME Development, bought a rundown property in Katutura for N$18 million without approval from the procurement board and the line minister. 
Schlettwein has now instructed the trade ministry to find ways to reverse the deal after property valuers estimated that the building is not worth more than N$4 million.
The trade ministry splashed a total of N$20 million- N$18 million for the purchase and N$2 million on renovations– for the building which previously operated as a bar and is located in the Windhoek high density suburb of Wanaheda, Katutura.
Investigations by the Windhoek Observer into the matter have revealed that the line minister, the BIPA board and Treasury were not consulted on the questionable transaction which was finalised in late August.
“The matter was brought to our attention following the Windhoek Observer exposé, and the situation is that Treasury was not approached and so there was no Treasury approval. If a property of that nature is purchased then it should have gone through the procurement process according to the procurement Act, but I am aware that this has not been the case and the matter was dealt outside the door, which is irregular,” Schlettwein said.
“When it caught our attention, we took it upon ourselves last week and informed the line ministry last week that the actions are unprocedural and the move must be corrected.”
The Windhoek Observer reported last week that the Permanent Secretary in the Ministry of Industrialization, Trade and SME Development, Gabriel Sinimbo, is being accused of colluding with BIPA CEO, Tileinge Andima, and Offshore Development Company Acting CEO, Phillip Namundjebo, in the controversial purchase of the former Katutura bar.
The property, previously owned by Windhoek couple, Hilma and Martin Shilengundwa, is in an old building which is surrounded by rundown gambling houses and bars.
The couple’s daughter, Anne Shilengundwa, a partner at the law firm, Ellis-Shilengundwa Incorporated, handled the N$18 million transaction, before resigning from her firm to pursue other business interests. 
Schlettwein explained that the building’s extremely high sale price does not reflect a reasonable value for the property and he has since ordered that there must be a board approval before State funds could be used.
“The other aspect which is of concern is that the money which they used for the transaction belongs to the ODC; so we have asked that there must be written board approval from ODC.  At this time, I am not sure if that happened.  I am waiting for the line ministry to come back to me with a response.
“If the money has already been paid, that is not to say that we cannot try to reverse the transaction.  Nevertheless, the first responsibility as Treasury is to make sure that transactions with State funds are done according to the legal requirements in terms of the procurement Act and that all necessary approvals have been completed.
“If the transaction’s completion status has passed the point of no return, then we will see how we will persue the matter by calling the permanent secretary to order and the officials [and boards] involved will be required to account,” Schlettwein said.
Responding to queries this week, the Central Procurement Board Chairman, Patrick Swartz, confirmed that the board was not consulted and no tender was ever issued out for the purchase of the building.
He said in terms of Section 9 (4) and section 7(4) of the Public Procurement Act, should the board find that there has been non-compliance with any provision of this Act, directives, code of procedures or guidelines made under its Act, it has the power to refer the matter with recommendations to the appointing authority of the staff member for appropriate action to be taken.
The Act also empowers the procurement board to refer any matter of non-compliance to the Namibian Police, Anti -Corruption Commission or any other competent authority for investigation, when it thinks appropriate, and must inform the public entity concerned.
Further investigations by the Windhoek Observer have established that the property has already been registered into BIPA’s name on 30 August, 2017. 

Not only are those involved in the deal said to have violated the Public Procurement Act, but apparently they also bypassed the Minister of Trade, Industrialisation and SME Development, Immanuel Ngatjizeko, who was never consulted on the transaction.
“I was not consulted or informed about it. I am only hearing it from you now. I do not know how this decision was made, I will find out,” Ngatjizeko told the Windhoek Observer last week.
BIPA board Chairman, Othy Kaakunga, claimed that Andima did not have the board’s blessings when he bought the property as he never sought their advice or approval.
Namundjebo together with his board Chairman, Gideon Shilongo, wrote to Bank Windhoek’s manager of International Business Unit on 24 July, signing off the deal for the payment to be released.
This week, Namundjebo through his lawyers, Theunissen, Louw & Vennote partners, denied colluding with others to buy a rundown former bar for N$18 million.
He said he rejects insinuation that he together with his chairman might have personally benefited from the deal by inflating the sale price.
“You published the said defamatory and untrue statements about our clients and the innuendo was raised that our clients were corrupt, serving their own personal interests for enrichment, manipulative, dishonest and fraudulent in their conduct. These insinuations were devoid of all truth and were injurious to our clients’ persons and reputations,” Namundjebo’s lawyers wrote.

Cost too high
However, a property valuer at Property Valuation Namibia, Jurie Scholtz, told the Windhoek Observer that the N$18 million purchase price was ‘way too high’.
“If you are talking about the property on erf 2780, then N$18 million is way too high. The property is not even worth more than N$4 million,” Scholtz said.
Calle, a worried man
Schlettwein is said to be under extreme pressure from his colleagues who are not happy with his move to block the misuse of public funds.
His recent and highly publicised clash with Attorney General, Sackeus Shangala, over his seemingly unauthorised, unbudgeted and un-consultative use of at least N$47 million in State funds to pay UK lawyers, is a case in point.
However, Schlettwein told the Windhoek Observer that although there may be unhappiness in some quarters due to economic difficulties, he has the support of President Hage Geingob to steer the Namibian financial ship through these current rough waters.
“I think I do have some support. The president is very adamant that we must get our house in order, we must deliver value for money; it is important for him.  So I have strong support from the highest level, even the prime minister supports this and we have talked about it.
“I am getting some support, but I am still a worried man because I do not see this [support from Geingob and the prime minister] trickling down to the point that one wants to see trickle down. These incidents are continually occurring; we have to step up and make sure that we deliver value-for-money services and goods.  We must not tolerate excess especially in tough times like this.
“And in the case of BIPA, the rules are simple and straight forward.  I don’t understand why they cannot be followed, there is no reason why they cannot be followed,”Schlettwein said.
 
 
 
 
 
 

WINDHOEK OBSERVER

The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

Contact Us

Windhoek Observer House
c/o John Meinert & Rossini Street
Windhoek West
Namibia
Tel: +264 61 411 800
Fax: +264 61 226 098
www.observer.com.na