Controversy continues to stalk newly established diamond marketing and sales company, Namib Desert Diamond (Namdia), after reports surfaced that the John Walenga co-owned C Sixty Investments has been sending invoices to the State-owned company for work not done.
The Windhoek Observer is in possession of minutes of a Namdia board meeting of 27 March, in which board Chairperson, Shakespeare Masiza, informed Mines and Energy Minister, Obeth Kandjoze that the diamond company’s working relationship with C Sixty Investments has been challenging.
Masiza said at the meeting that C Sixty Investments, which was controversially appointed as the valuer of Namdia diamonds by the energy ministry without the company’s board input and knowledge, has been sending them invoices of work that was not performed.
Although it was not immediately clear how much C Sixty has been paid to date for valuating Namdia diamonds, Kandjoze was told that the diamond marketing company had on numerous occasions unsuccessfully requested a meeting with C Sixty Investments’ Chairperson (Walenga) to clarify the invoices and to reach an agreement on the way forward.
Kandjoze confirmed to the Windhoek Observer that he was aware of the disputed invoices from C Sixty Investments.
“Sufficient time has now been invested in listening to both parties. The Ministry of Mines and Energy is tackling this matter head-on,” the minister said.
In addition to the disputed invoices, the Namdia board is also not happy with the Service Level Agreement with C Sixty Investments that was signed by Kandjoze’s Permanent Secretary, Simeon Negumbo, on behalf of the diamond company.
Namdia Director Bonny Konjore told the 27 March board meeting that he had reservations regarding the 1 percent of total sales payable to C Sixty after every sale.
He argued that this payment is not sustainable, given that C Sixty is also paid for every carat it evaluates.
C Sixty Investments charges an additional fee for valuating diamonds above two carats. Diamonds with carats in the range of 2 to 4.99 are charged at US$50 (N$649) per carat, while those in the 5 to 6,99 carat range are charged at US$60 (N$779) per carat.
Diamonds with carats between 7 to 9,99 attract a US$75 (N$974) charge per carat and those between 10 to 25 carats are charged at US$100 (N$1,298) per carat.
The Namdia board sought a legal opinion in April this year regarding its liability to honour the Service Level Agreement signed between C Sixty and the Ministry of Mines and Energy in October 2016.
According to an expert opinion by Theo Frank, there is no basis on which Namdia can be held liable for the fees due to C Sixty Investments, as stipulated in the contract. He added that any objection against the appointment of C Sixty Investments should be taken up for judicial review.
Another legal opinion provided by the Office of the Attorney General in November last year suggested that C Sixty Investments should be paid for their valuation services rendered to Namdia from the Diamond Valuation Fund.
Kandjoze is said to have indicated at the 27 March board meeting that the Service Level Agreement signed between the ministry and C Sixty is open for renegotiation should the need arise.
Meanwhile, the Namdia board has been accused of bypassing a key process in the appointment of Kennedy Hamutenya as chief executive officer.
Information obtained by the Windhoek Observer shows that the board changed its initial CEO recruitment process to suit Hamutenya, who sources at the parastatal allege is Mines and Energy Minister’s preferred candidate for the job.
According to documents seen by the Windhoek Observer, the Namdia board at its 13 February meeting ignored references as scoring criteria after Hamutenya received bad references, which would have ruled him out of the running for the CEO position.
Hamutenya, who has served for many years as Diamond Commissioner, has been acting CEO of Namdia since it became operational on 18 April 2016
“Mr Konjore informed the meeting that a mistake was made with the rating of a reference, i.e., if a candidate received a bad reference the candidate will score 0 and if the candidate received a good rating, the candidate shall be scored 3. However, this was not done in the recruitment process of the CEO, whereas it was done with the other positions that were interviewed on the same day,” minutes of a Namdia board meeting read.
Contacted for comment, Masiza referred the Windhoek Observer to Kandjoze, who in turn said he was not the right person to comment on the appointment of the parastatal’s CEO.
The minister also denied that he had pushed for Hamutenya’s appointment.
“By teachings of corporate governance principles, no minister ever appoints either a managing director or chief executive officer. The Office of the Minister of Mines and Energy therefore strongly refutes such deliberately planted nonsense in the face of such fundamental corporate governance requirements,” Kandjoze said.
“If I understand the logic of your question, you seem to be implying that some wrongdoing may have occurred at that level (board) and it is thus logical for you to interrogate that wrongdoing at the Namdia board level rather than ascribing the alleged wrongdoing to the minister.”
Hamutenya expressed ignorance on the purported appointment. “No one has notified me of any appointment,” he said.
The Namdia board is made up of Masiza, Tania Hangula, Bonny Konjore, Lorentha Harases, Florentia Amuenje, Venondjo Maharero and Chris Nghaamwa.
According to documents seen by the Windhoek Observer, Namdia bought 17,882,22 carats from the NDTC for US$8,320,159,46 (about N$108 million) and sold them at US$9,570,000 (about N$124 million).
In January this year, the company sold diamonds worth US$11,8 million (US$153 million), followed by a sale worth US$16,9 million (N$220 million) in March and sales worth US$13,6 million (N$176 million) in April.
Efforts to get comment from Walenga proved futile, as he did not respond to calls or sms messages sent to him seeking clarity on the invoices.