Mulunga probe eats into Namcor profits

06 April 2018 Author   Sonja Smith
The Patrick Kauta-led National Petroleum Corporation (Namcor) board has so far spent N$3,6 million digging up dirt on Managing Director, Immanuel Mulunga, who is alleged to have influenced the awarding of a N$2,2 million tender in favour of a Malaysian company.
Sources familiar with the investigation which is still ongoing, said the probe, which is likely to cost Namcor more, has so far cost the State-owned petroleum company about 16 percent of its net profit for the 2017/2018 financial year. 
The Windhoek Observer has seen an invoice sent by the Director of Risk Advisory at Deloitte Namibia, Melanie Harrison, to Namcor’s corporate governance executive, Damoline Muruko, dated 20 March 2018.
Namcor sources, who refused to be named for fear of reprisals, accuse the Kauta-led board of not following procurement procedures when they hired Deloitte to dig up dirt on Mulunga.
“They didn’t follow the procurement process when they appointed Deloitte and the investigation was never budgeted when they appointed them, it should be the Procurement Policy Unit (PPU) that is permitted to investigate procurement decisions or any other law enforcement entity,” the source said.
“The current charges are about N$3,6 million, but with the work that still needs to be done, it will rise up to N$4 million or N$5 million eventually as Deloitte charges per hour.”
The source added that although Mulunga’s investigation was initially based on suspicion that he had influenced the awarding of a N$2,2 million tender to Hyrax Oil for the  supply of lubricants to Namcor, Kauta has since changed the scope of the investigation several times.
“I can tell you that the scope of the investigation is being changed from time to time. When they (investigators) started, they were investigating Mulunga for the Hyrax tender and for allegedly appointing people unprocedurally.
“Thereafter, they started investigating several tenders and now they are investigating credit card usage. It’s like they are now fishing trying to find something wrong when they couldn’t find what they were looking for initially,” the source said.
Mulunga’s investigation began in December 2017, after the Windhoek Observer reported that the Namcor board was being accused of usurping management powers after it ordered the termination of employment contracts of 10 temporary workers placed across strategic departments at the State-owned oil company.
At the time, the board chaired by Kauta, directed management headed by Mulunga to terminate the contracts on 27 November, without giving any valid reasons.
A legal opinion provided by lawyer Gabriel Frank Kopplinger regarding the termination of the fixed-term contract employees concluded that the termination of seven of the ten temporary fixed-term employees will be seen as unfair dismissals in terms of the Labour Act if it is challenged in court.
“If challenged, there will be an award made for loss of income against consultant (Namcor),” Kopplinger wrote to Namcor last year.
Despite the legal opinion, the Namcor board insisted that the workers’ contracts be terminated.
Namcor has since been dragged to court by the dismissed employees and the matter is now set for arbitration in June.
Mulunga and IT executive Bonifatius Konjore were placed on special leave on 18 December to pave way for a forensic investigation at the company.
Sources said the investigation by Deloitte has so far failed to find anything wrong against the two executives who have since resumed work.
Public Enterprises Minister, Leon Jooste, is on record saying the allegations levelled against Mulunga and his executive could have been investigated without putting the two on special leave, as this action has caused irreparable damage to the Namcor brand.
Jooste said this week that he was aware of the investigation by Deloitte and that he has since written a letter to Kauta asking why the investigation has not been completed.
“The investigation was supposed to be concluded in January already.
“I have asked for clarification ….in my letter and I will decide how to proceed when I receive the response, ” Jooste said.
In an interview with the Windhoek Observer last week, Mines and Energy minister, Tom Alweendo said that he had advised the Namcor board and management to work as a team.
“I did have a meeting with the board and management of Namcor, but I did not meet them to discuss their problems; I met them simply like I met all the boards under this ministry. The message I have given to all of them is that things work better when we work as a team,”Alweendo said.
Mulunga told the Windhoek Observer that the investigation by the Namcor board is based on gossip and hearsay.
“Yes I am aware of that, can’t recall the exact amount, but it is certainly in that region. Yes it was also brought to my attention that they have widened the scope to investigate other matters as well.
“I have regarded this as a vexatious investigation based on merely gossip and hearsay. I am eagerly awaiting the results of this investigation,” Mulunga said.
Kauta was contacted for comment but did not respond to enquiries


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.

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