NAMZIM Newspapers, which has accumulated losses of more than N$16,3 million from its establishment in 2005 up to 2010, has recommended an astronomical increase in the annual payment of its board members.
The proposed figures are way above what is set by the State-Owned Enterprise Council.
Namzim Newspapers is a joint venture between New Era Publications Corporation, the publisher of government-owned New Era newspaper, and Zimpapers of Zimbabwe, and owns the weekly regional newspaper, The Southern Times.
What makes matters worse is that Namzim is registered under the Companies Act and according to its auditors it is technically bankrupt with its liabilities exceeding its assets.
During an extraordinary meeting of a Namzim Newspapers board under the chairmanship of Ben Mulongeni, it was decided that the directors' fees should be increased by 30% and 38% for the chairperson and ordinary members respectively.
During May last year the fees increased to an annual fee of N$98 000 for Mulongeni, N$96 000 for the deputy chairperson and N$92 000 each for the remaining four members.
The total annual directors' fees currently amount to N$562 000.
According to Mulongeni the adjustments of the directors' fees is at this stage only a proposal. "This should still be discussed by the full board of directors and they can still decide to reject it," Mulongeni told The Namibian.
In terms of the proposal the annual fee for the chairperson will be N$136 000 per year, his deputy will receive N$132 000 annually, while the annual compensation for the ordinary members will be N$120 000 each. The total annual fees to be spent on the directors would be N$748 000. In terms of the directives of the SOE Council on annual fees and sitting allowances for board members, the maximum that a chairperson can receive annually is N$118 969, while the median is N$80 976 per year. In the case of an ordinary board member the highest annual fee is N$86 545, while the median for these members is N$60 715 per year.
Apart from receiving an annual subsidy from the Namibian government, which accumulated to more than N$32 million, Namzim also owes New Era Publications more than N$14 million and Zimbabwe Newspapers about N$3 million.
"At the year-end Namzim Newspapers (Pty) Ltd owed New Era Publications Corporation an amount of N$ 14 404 129 (2009 - N$ 8 373 309). It is uncertain whether this amount is recoverable. A provision of N$ 14 366 984 (2009 - N$ 8 066 983) has been made for this amount. Management is of the opinion that the unprovided amount of N$ 37 145 (2009 - N$306 326) will be recovered by the Corporation," said Auditor General Junias Kandjeke in his report on the accounts of New Era Publications for the financial year ending 31 March 2010.
With the establishment of the joint venture in 2005, the Namibian Cabinet urged government ministries, parastatals, civil society and the private sector to continue supporting Namzim and its subsidiary, namely The Southern Times, through advertisements, sponsorships and buying the newspaper.
However, during the 2009/2010 financial year it recorded a loss of N$3,2 million and during that year the company did not pay over taxes deducted from its employees to the Receiver of Revenue, which amounted to more than N$1,1 million.