The appointment of the executive director of the Namibia Industrial Development Agency (Nida) has been deemed illegal as it is contrary to the Nida Act 16 of 2016.
Nida's new board of directors appointed Uparura Kuvare - a fellow board member - as the parastatal's executive director, which is a position equivalent to chief executive officer, with effect from 1 January 2019.
Kuvare will serve in that position until a substantive CEO is appointed, while remaining a board member.
The act specifically prohibits the appointment of a sitting board member as CEO of the agency.
According to new chairperson Frans Kwala, the Nida board appointed Kuvare as a result of a lack of capacity, and could not bring in an outsider to assist with the management of the company.
The board took office on 1 August 2018, and will serve until 30 July 2021.
Kwala confirmed that although Kuvare's position is the same as that of a CEO, the agency is not yet at the stage of appointing a CEO.
Kwala explained that Nida can only hire a substantive CEO once the structure is finalised and approval of the budget, which is currently in progress, is done.
"Nida has no substantive head. We could not bring in an outsider to assist with the management of Nida. There is nothing that makes our decision illegal as it's in the best interest of Nida. As soon as we have done our groundwork, which is our focus, we will advertise the position," Kwala told The Namibian.
According to Section 20 (1) of the Nida Act 16 of 2016, and subject to the provisions of section 32(1), the board, with the approval of the minister, must appoint a person, other than a director, to hold the office of chief executive officer.
Kwala further argued that the new Public Enterprises Governance Act (PEGA) makes provision for Kuvare's appointment.
"There is nothing illegal to second a director to act. Look at the PEGA Act. It makes provision for an executive director. Currently, our efforts with the appointment of the executive director is in the public interest. But this is probably from the corrupt people who are now bitter after the appointment of the executive director.
"I am sure your informant is one of the corrupt people who are no longer eating. Eating stopped with the appointment of the executive director," Kwala said.
Although Kuvare was appointed in January 2019, the Public Enterprises Act was only enacted in May 2019.
Cabinet approved the establishment of Nida in 2015 as a state-owned enterprise (SOE).
The primary function of Nida is to actively facilitate and drive industrial development in the country in line with the industrial policy and its 'Growth at Home' implementation strategy towards the achievement of Vision 2030 goals.
Nida is an amalgamation of the Namibia Development Corporation (NDC) and Offshore Development Corporation (ODC) taking both their regulatory as well as operational mandates.
Human rights lawyer, Norman Tjombe told The Namibian that the appointment of a director as a CEO of Nida is unlawful.
"The appointment of a director as a CEO of Nida is unlawful as that is expressly prohibited by section 20(1) of Nida's enabling legislation. In a previous case involving the appointment of a director as acting CEO of NHE, the court did not hesitate to declare it unlawful," Tjombe said.
Commercial lawyer Kadhila Amoomo said the act states clearly and unambiguously that the board must appoint a person "other than a director" to be the CEO.
"How is this not clear to them? The appointment of a person to serve as a CEO whilst that person is a director, if confirmed to be true, is therefore not permissible as such would be contrary to the provisions of Section 20 (1) of the Nida Act specifically and contrary to the principles of corporate governance in general,"Amoomo said.
In August 2018, minister of industrialisation, trade and SME development, Tjekero Tweya announced the new board of directors for the Namibia Industrial Development Agency (Nida) and the Namibia Estate Agents board (NEAB).
Initially, the Nida board consisted of Diana van Schalkwyk, Anita /Naris, Job Muniaro, Hans Jochelson, Uparura Kuvare and Marcelina !Gaoses.
Jochelson and !Gaoses left, and in March this year, two new members were appointed to the Nida board.
They are Namfisa executive, Erna Motinga as vice chairperson and NDC executive Koos van Staden.
Insiders are questioning why Nida is not appointing a substantive CEO who can drive developments of the strategic thrust of the new entity.
When asked whether he was aware of the appointment, public enterprises minister, Leon Jooste told The Namibian that: "We are looking into the matter."
Kuvare, when approached for comment said there was nothing untoward about his appointment to the position.
"I was seconded by the board and it was legally done. Although I have the unhindered executive powers just like the CEO, I still consult the board on decision making," he said.
Kuvare said the position will be advertised soon, and insisted that all executive positions at the institutions were still vacant.
"I know what the act says, those who are waiting for the position must just wait, it will be up in the public. I am just serving on an interim basis. We cant appoint a CEO now, when there are no proper things put in place," he said.