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How Hidipo presided over corruption

By Asser Ntinda
Two interesting companies which joined hands with the well-funded but loss-making Development Brigade Corporation, DBC, and the Amalgamated Commercial Holdings Company, AMCOM, are the Moonstone Diamonds Namibia, MDN, and the Namibia Mining Empire, NME.

They proved disastrous for DBC, but the public hearings conducted by the Presidential Commission of Inquiry into the operations and activities of DBC and AMCOM, revealed that DBC General Manager, Simon Shikangala and some shadowy figures behind the scene might have waxed rich in deals and illegal sales that followed shortly after the deals were signed, sealed and delivered.

The Presidential Commission of Inquiry was informed that Shikangala entered into an agreement with MDN on behalf of DBC, buying 800 ordinary shares in MDN without the approval of the DBC Board. When pressed by the Commission, Shikangala admitted that he entered into the agreement on the "firm instruction" from then Trade and Industry Hidipo Hamutenya.

Although the Commission was informed that Shikangala was "reprimanded" by the Board, it eventually caved in and ratified the agreement. There was heavy "ministerial pressure" on the Board to ratify the deal. But the most interesting one was the deal between DBC and NME, which saw DBC losing over N$5 million at a stroke of a pen.

NME had six mining claims for nine months between 1999 and 2000, and roughly produced 9,5kg of tourmaline in that period. Shikangala sold the 9,5kg for N$1 456, 35 - an awkward and unheard of price, the Commission was informed. The tourmaline was sold for a song to Khan River Mining & Exploration Company, owned by a certain Chris Johnstone, who made the offer through a facsimile to Shikangala, which in part read as follows:

"I had the opportunity to inspect the DBC's rough tourmaline holdings on Friday morning in the offices of your CFO. As I am sure you are aware, the bulk of the rough is low quality, only suitable for tumbling.

"Rather than waste a lot of time trying to select the best, I am prepared to take all the material and pay you the equivalent of USD 25/kg or N$173,5/kg as is. Current market for tumble grade is +- USD 2 to 5/kg."

Shikangala agreed and sold the tourmaline at that give away price. Surprisingly, Johnstone acted as both the "valuator and buyer" of the stones. But during the public hearings, Shikangala first claimed that he could not remember having ever been involved in the deal. "Ask the Minister, he acted as the overall boss. I can't remember. Those are things that may have been done by me or by whom?"

Shikangala asked the Presidential Commission of Inquiry. All in all, during Shikangala's time, DBC entered into more than 24 disastrous joint venture agreements with local and international companies, purportedly to build houses, drill boreholes, construct roads, develop computer industry and financial systems as well as other lucrative businesses.

Ninety per cent of the joint venture agreements were not approved by the DBC Board. They were entered into on the firm instruction of Hamutenya himself, flouting tender procedures and good corporate governance practices, the "forgetful" Shikangala, the longest serving General Manager of DBC told the Presidential Commission of Inquiry.

Under his management, the government allocated more than N$200 million, but Shikangala could only "recall N$10 million." When pressed by the Presidential Commission about what happened to this money, Shikangala asked: "How come I do not know this?"

The public hearings revealed one thing. Had Cabinet decisions been followed and implemented as resolved, both the DBC and AMCOM, as well as their subsidiaries, could have yielded desired results. The tag of war between AMCOM and the Namibia Development Corporation, NDC, was simply fuelled by Hamutenya himself, the Commission was informed by witnesses.

There were good intentions between the Namibian and Malaysian governments on loan agreements entered into by DBC and Bank Indsutri Malaysia Berhad. But line Minister Hamutenya intervened at almost every point that the agreements went horribly wrong, the Commission was informed. There were no clear guidelines on what Hamutenya, the Board and Management should do. Hamutenya exploited that vacuum to the detriment and eventual downfall of DBC, and AMCOM.

Apart from the N$200 million which the government pumped into DBC, the Corporation also received 112 vehicles worth more than N$9 million in 1994. And plots outside Grootfontein from Goldfields worth N$350 000. Most of the plots and vehicles disappeared. Shikangala could not "remember" what happened to those vehicles and plots.

"Maybe you should ask Minister Hamutenya," remarked Shikangala when asked by the Commission. "He was in charge, he really was in charge. I might have forgotten some of the things. I do not know. I have amnesia sickness. I tend to forget very easily."

In 1994 alone, government allocated N$17,85 million to DBC. The Corporation generated N$1, 9 million that same year, bringing the total income to more than N$19,73 million in that financial year. But DBC's expenses were over N$33, 42 million, which meant DBC lost more than N$13, 7 million due to mismanagement and undue interference by Hamutenya.

NB: This story has been reproduced to unpack Hidipo's lies.


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