14 May 2018

Namibia: RCC Property Seized Over Debt

The financially troubled Roads Contractor Company (RCC) had some of its assets at Keetmanshoop recently attached over a N$4 million debt owed to Namibia Protection Services (NPS).

About two weeks ago, the Keetmanshoop deputy sheriff pounced on the RCC's Keetmanshoop office and attached property, including furniture, earthmoving equipment, vehicles and computers, as part of enforcing a High Court order.

A settlement was reached between RCC and NPS last year for the outstanding debt to be paid by January this year, but the parastatal failed to honour the deal.

Deputy sheriff Pieter van Heerden confirmed attaching the property at Keetmanshoop, saying the auction date has not yet been set.

"I understand they [RCC] want to settle the debt," he added.

RCC staff at Keetmanshoop told The Namibian that they had been locked out of office by the deputy sheriff, who hired a security company to guard the parastatal's attached assets.

"Whenever we want to access the office, we must call the security company's boss to unlock the premises for us," said a worker, who preferred anonymity.

Van Heerden refuted claims of RCC workers being locked out, and said they only do not have access to the assets which had been attached.

Last November, Cabinet resolved to place RCC under judicial management.

However, since a bill authorising administrative management has not been tabled in parliament yet, the RCC can still be sued by creditors.

Public enterprises minister Leon Jooste referred The Namibian to the works ministry, saying the RCC was still under the latter's authority.

Works minister John Mutorwa said his focus was on the company's future, and referred The Namibian to RCC chairperson Fritz Jacobs and acting CEO Seth Herunga.

Mutorwa, however, said he was dealing with the company's "transition to a self-sustaining funding model", a proposal submitted by the RCC management in the hope of rescuing the parastatal from liquidation.

"I am dealing with a bigger problem," he stated.

The RCC signed a N$570 million agreement with Chinese company Jiangsu Nantong Sanjian to boost its finances and survival chances, as the government has decided not to bail out the parastatal.

Finance minister Calle Schlettwein last week said he wanted the government to seek a court order declaring the agreement illegal.

It appears the RCC board intentionally circumvented Schlettwein and Jooste because some directors suspected the two ministers would block the agreement.

Mutorwa acknowledged that there was an issue with the agreement because it had been signed without government approval. According to him, the agreement has been referred to the attorney general (AG) for an opinion.

"We are waiting to see the AG's decision on the legality of the agreement," Mutorwa said.

He said he hoped the RCC would correctly implement a self-sustaining funding model.

Herunga said lawyers were addressing the Keetmanshoop situation, and that management was awaiting advice on the way forward.

He said the RCC would be able to "sustainably normalise operations" when its self-sustaining funding model kicked in.

"The real work will start as soon as we take the first steps to normalise the company's balance sheet," he noted.

Herunga added: "It would be very unjust and unreasonable if we do not consider such a significant milestone after all the financial distress and emergencies the company has been made to endure because of past mismanagement, inadequate corporate governance and other factors.

"The current financial distress situation is essentially avoidable because the solution has been found," he said.

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