9 November 2018

Namibia: Telecom Defends Executive 'Bonuses'

TELECOM Namibia's chief executive, Theo Klein, defended the parastatal's decision to pay over N$2 million to seven executives, despite concerns by the board that the entity was not supposed to make such payments because of its financial problems.

Klein told The Namibian on Wednesday that the N$2 million was paid to the seven executives, including himself, but there was nothing wrong with the payments since they were paid out over four years since 2014.

"We can confirm that payments were made to the management cadre, who are on a five-year fixed-term contract," he said.

An analysis of Telecom's annual reports shows that those payments were made when the parastatal incurred a N$284 million loss during the four-year period.

According to Klein, these payments, which were allegedly not approved by the board, are not annual bonuses, but special payouts.

"These payments are, however, not bonuses, but a premium payable in line with the fixed-term contract, dependent on a pre-determined individual performance level," he stated.

The executives who were paid are: Klein (N$618 000); suspended head of legal services Jinah Buys (N$212 000); chief mobile officer Armando Perny (N$399 940) and chief operations officer Laban Hiwilepo, who got N$401 100.

Others are chief commercial officer Calvin Muniswaswa (N$531 250); chief human resources officer Holger Sircoulomb (N$103 600); and Powercom chief executive Alisa Amupolo, who was paid N$232 284.

Documents show that Klein was given a premium payment of N$103 900 in 2015, N$249 500 in 2016 and N$264 500 in 2017.

A document seen by The Namibian states that the board wrote to Klein on 30 October 2018, questioning how the parastatal paid for the bonuses, and proof of who authorised such.

Klein confirmed that he responded to the queries of the board on 1 November 2018. In the letter to the board, he said the seven executives have what is called a fixed-term contract, which includes a premium bonus payment.

He said Telecom is obliged to pay the executives a lump sum amounting to 25% of the employees' annual total income.

For the employee to qualify for the payment of the end-of-contract premium pool, Klein said, they need to achieve at least an average performance rating of three in their performance evaluation over the five-year targets.

The Telecom boss told The Namibian yesterday that the seven executives were not paid annual performance bonuses because the company never met its targets since 2014.

He added that the officials are likely to be paid bonuses this year.

"For the September 2018 results, so far it seems that we will meet the target[s] for the first time in five years. The turnaround strategy is paying off now," he said.

Klein insisted that he has "no doubt that if there was anything irregular with these payments, the board would have taken swift action in this regard".

Annual reports analysed by The Namibian show that the Telecom group - which includes Telecom Namibia and infrastructure and equipment provider PowerCom - made losses from 2014 to 2016.

The group recorded losses of N$205 million in 2014, N$53 million in 2015 and N$26 million in 2016.

However, in 2017, the group made a profit of N$247 million, which included N$200 million from the sale of its shares in Neotel (Pty) Ltd (South Africa).

This profit was used to pay off Namibia Post and Telecommunications Holdings' (NPTH) loans of N$200 million. Without the sale of the subsidiary, the group would have made a profit of only N$47 million, though boasting a N$1,5 billion revenue rake in.

Further analysis of Telecom's 2017 financials shows that the group's current liabilities exceeded current assets by a massive N$269 million, including a N$49 million bank overdraft.

- Additional research by Lazarus Amukeshe

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