Meat processing and marketing company, Meatco, says it has finally opened a bank account with Barclays Bank UK after several challenges that delayed the process for about six months.
The meat producer has been struggling to open a new bank account in the UK after serious concerns were raised on three of its five board members following a due diligence on the company’s executives and board members by UK banks.
The company was forced to look for an alternate bank as its foreign account that was being housed at the Royal Bank of Scotland (RBS) in the United Kingdom was faced with closure after RBS decided to withdraw from international banking activities.
In a letter seen by the Windhoek Observer, Meatco was given 90 days to find an alternative bank as of January 2018.
The Windhoek Observer is in possession of a report from Barclays Bank UK which shows that background checks carried out by the bank had raised red flags on Chairperson of the Board Martha Namunjebo-Tilahun, Vice Chairperson Ronald Kubas as well as co-opted board member Edwin Beukus.
According to Barclays, as Director of Standard Bank Namibia Limited since 2007, Tilahun presents a potential conflict of interest as this bank currently extends several loan facilities to Meatco.
The report also uncovered that as co-owner of United Africa Group (UAG), the company is part of an ongoing corruption investigation by the French judiciary in relation to kickbacks paid by the mining division of French nuclear power company Areva now known as Orano.
Kubas, who is also chairman and Managing Director (MD) of Burmeister and Partners (Pty), Ltd an engineering consultancy, was flagged over tenders awarded by the Ministry of Agriculture, Water and Forestry for the construction of abattoirs.
“The commissioning of these food processing abattoirs appears to be directly related to Meatco board level decisions. This means that Kubas roles at both B&P and Meatco could pose a conflict of interest,” the Barclays report stated.
Kubas was also flagged over his involvement with Emmanuel Mangosi who is the deputy director for engineering services in the Ministry of Works and Transport based on 2016 allegations that Kubas, through his company, had awarded a bursary to Mangosi’s son to study at Coventry University in the UK.
In the report, Barclays stated that B&P receives substantial contracts from the works ministry even though the two have previously denied any foul play.
Barclays also questioned Beukes’ role as a co-opted board member as his role is not clearly defined in Meatco’s corporate literature.
Other issues that were flagged include the accounting and auditing firm Grand Namibia which won an audit tender from Meatco in 2017. Barclays said the company was co-founded by a “relative” of Beukes, a Ronald Beukes which calls into question the independence of the auditor.
“It is possible that Beukes’ role on Meatco’s board of directors and the company’s Audit and Risk Committee combined with his presumed relatives beneficial interest and senior role at the company’s auditor Grand Namibia, presents a conflict of interest. Meatco UK is audited by KPMG, while its Namibian parent company is audited by Grand Namibia- despite KPMG having a presence in Namibia,” the report stated.
However, Meatco executives maintained this week that the background checks were a formality and did not hinder the company from opening an account.
Acting Chief Executive Officer Jannie Breytenbach said the only concern raised regarding the board members were that they were classified as Political Exposed Persons.
He also said people should understand that Namibia is very small country so expert people are normally involved in more than one business.
“That is a challenge that we have,” Breytenbach said.
“There was a bit of confusion there, but that did not hinder us from opening an account.”
Quizzed on why it took 180 days for Meatco to open an account, Meatco Acting Chief Financial Officer, Ilana Brown, blamed the delay on Meatco’s own administrative challenges.
“A big challenge was internal, we had a challenge where board members were not available at the drop of a hat; they were travelling and had busy schedules.
“All of the documents we needed to submit had to be certified in the presence of a lawyer so for each and every director we had to make a separate appointment with our lawyers and get them there to certify the documents and make sure that everything correlates with other documents. That had nothing to do with Barclays,” she said.
Brown said Meatco UK had successfully opened an account on Tuesday, but that the bank had given them a 90-day grace period to establish and implement the Anti-Corruption Bribery policy, which is one of the requirements of international laws.
“They asked us to revise certain policies within the Meatco framework because that is a requirement for them to do business with us,” she said.
She added that funds from RBS will only be transferred next month.
Meatco justified using a different auditing firm than that of its subsidiary company in the UK, saying Grand Namibia was not an international company.
The executives, however, admitted that Meatco was facing cash flow problems which they attributed to the state of the Namibian economy and not the UK account.
About 65 percent of Meatco’s yearly revenue is generated from the EU and Norwegian markets.
There appears to be a lot of suspicion amongst Meatco employees and members ahead of this Friday’s AGM and planned retrenchments.
“Meatco is in a process of re-alignment so there is a lot of uncertainty with some of the staff members and we need to take that into consideration going forward,” Breytenbach warned.
When contacted for comment, Kubas denied ever seeing the report before referring this reporter to Barclays Bank UK to get clarity since they had compiled the report.
“I am not aware of the report, call the bank and follow it up with them because it is their document. I cannot speak on a document I have not seen. Get clarification from them. I can confirm that I am the MD of Burmeister and Partners (Pty), Ltd and also Vice Chairperson of the board,” he said before he hung up the phone.
Beukes on the other hand confirmed having seen the report but denied the allegations.
“We are not related, we are friends on Facebook just like I am friends with so many people on Facebook,” he said.
Efforts to get comments from either RBS or Barclays Bank were fruitless by the time of going to print.