ALTHOUGH Namibia Wildlife Resorts (NWR) disputes that NWR effectively sold seven State-owned resorts to BEE companies under last year's controversial empowerment deal, documents seen by The Namibian show that some of these companies are now using State assets as collateral to raise loans.

For example, Tungeni Africa Holdings, which paid N$3 million for a 100-year lease of the Von Bach Dam campsite, reports fixed assets of N$9,18 million in its most recent financial statements for wholly owned subsidiary Tungeni Serenity Experience as of January 30 2009.

The company has no assets other than the resorts leased from the NWR - which contract it valued at N$25 million as "goodwill". Its accounts show it has paid N$1 million to the NWR so far - but received income of N$1,311 million for the six months it had been leasing the Von Bach and West Coast Recreational Park campsites.

Tungeni is now trying to raise N$41 million against these assets to build a highly controversial, 240-home 'Lifestyle Village' on the banks of the Von Bach Dam, Windhoek's main source of drinking water.

Tungeni MD Iyaloo Nangolo has denied that their lease agreement is in any way illegal.

But this appears to be in violation of Article 18 of the State Finance Act (Act 31 of 1991), which states: "Notwithstanding anything to the contrary in any other law contained, no movable and no immovable property of the State shall be alienated, let, exchanged, donated or otherwise disposed of without the authorisation of the Treasury."

No such Treasury approval was ever obtained, The Namibian has established from the Ministry of Finance. NWR MD Tobie Aupindi insists that this was not necessary.

MET Permanent Secretary Dr Kalumbi Shangula, asked in an interview last Thursday to comment on the legality of these transfers of State assets into private hands, chose to remain silent.