‘Cleared’ Mulunga falls on Enercon sword

After being cleared in the Angolan oil block debacle by a disciplinary committee on Wednesday, Namcor managing director Imms Mulunga was fired late yesterday over, among other things, his alleged hand in the N$53 million transaction between Namcor and military contractor Enercon.Namibian Sun understands that new Namcor board members, who were not responsible for suspending Mulunga in April 2023, left a company strategic retreat halfway yesterday for a meeting with public enterprises minister Ipumbu Shiimi to discuss Mulunga’s acquittal after a lengthy disciplinary hearing found him not guilty.Although Mulunga was suspended in connection with making an unauthorised payment of N$123 million to Sungara Energies, a joint venture company co-owned by Namcor through which partners intend to acquire a stake in an Angolan oil block, he is facing new charges related to his alleged involvement in Enercon deal. The Namibian reported that Enercon, owned by brothers Peter and Malakia Elindi, as well as military company August 26 Holdings, received N$53 million payment from Namcor last year as part of a transaction which would have seen Namcor take over a fuel supply contract and related infrastructure business with the Namibian Defence Force (NDF).Yesterday’s meeting allegedly decided to fire Mulunga, because of a litany of allegations he is facing – separate from those he was acquitted on.Mulunga yesterday told Namibian Sun that he is abroad and has not been served with a dismissal notification. “All I heard is that the board has a letter for me – but I don’t know its content,” he said, briefly.Shiimi referred the questions to the board, which in a late statement said: “During a meeting held on 8 August, the board deliberated extensively on a case of misconduct involving Mr Mulunga. Following these deliberations, the board resolved to terminate Mulunga’s contract of employment.” The statement added that the board considers the ‘misconduct’ by Mulunga to be of a serious nature, warranting this decisive action. It did not specify the misconduct.Not guiltyIn a verdict handed down on Wednesday, an independent disciplinary hearing found Mulunga not guilty on both charges he was facing - fraud and breach of employment contract. The charges against him related to an Angolan oil deal that Namcor, together with its partners, is pursuing through their joint venture vehicle Sungara Energies Limited.The case revolved around financial transactions in 2022, involving the transfer of N$123 million from Namcor Exploration and Production, a wholly owned subsidiary of Namcor, to Sungara. Sungara was created to acquire valuable petroleum assets in Angola.The transfer, allegedly executed without prior approval from Namcor’s board of directors, raised concerns about potential overreach and lack of transparency. Mulunga faced three charges, fraud for allegedly withholding critical information from the board about his intent to authorise the transfer, breach of his employment contract and leaking confidential communication to the media.The latter charge was dropped due to insufficient evidence. The board argued that Mulunga’s actions exposed Namcor to unnecessary financial risk.“We were faced with a situation where an additional US$6.7 million was transferred to Sungara without our knowledge or approval, increasing our financial exposure significantly,” it noted. The board’s concerns were aggravated by the fact that Sungara’s other joint venture partners, Petrolog and Sequa, were unable to meet their financial commitments, further straining Namcor’s resources. It contended that Mulunga’s decision to advance additional funds without prior approval violated his contractual duties and jeopardised the company’s financial stability.Reputational damageIn his defence, Mulunga stated that his actions were essential to secure a highly strategic and potentially lucrative petroleum deal with Sonangol, the state-owned Angolan oil company. According to him, any delay could have jeopardised the transaction, leading to significant reputational damage for Namcor - both domestically and internationally. He argued that cancelling the deal would have led to severe reputational damage for himself, the board and the Namibian government. “It would have been a much more difficult proposition for me to explain the loss of such a game-changing transaction to the board while there was an opportunity and the means to rescue it,” he said. “I believe that this money will indeed be returned to Namcor. In the unlikely event that it is not returned before completion, there are multiple ways that Namcor’s risk has been mitigated. Firstly, by limiting our residual exposure... through the two deeds of guarantee forms from Petrolog and Sequa. Secondly, by Trafigura and Vitol’s written commitment to cover Sequa and Petrolog’s shortfall via an equity bridging facility if necessary,” Mulunga argued.No deceptionFormer Supreme Court judge of appeal, Gerhard Maritz - who chaired the disciplinary hearing - ruled that the charges of fraud and breach of trust were not substantiated on a balance of probabilities.“There is no evidence that the employee’s failure to disclose his intention to transfer the funds was done to deceive. The authority vested in him by the board’s resolution supplemented and prevailed over the limitations in his employment contract,” he said in his ruling. “It seems to me that for as long as a director acts within the ambit of an authority vested in him or her and in the bona fide belief that he or she is serving the best interest of the company, it will be difficult to conclude that failure to disclose his intentions beforehand to the board of directors was done to deceive. It follows that all the complaints against him in these proceedings are dismissed,” Maritz added. nikanor@erongo.com.na

‘Cleared’ Mulunga falls on Enercon sword

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Namibian Sun 2024-11-25

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‘Cleared’ Mulunga falls on Enercon sword

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Namibian Sun 2024-11-25

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