In the red: Nored living hand to mouth

Fresh information has unveiled a damning indictment of Nored’s inefficiencies, while providing a glimpse into its precarious financial affairs.Alleged insider trading, bribery, uncontrolled spending, leaking of confidential information, abuse of company vehicles and the use of counterfeit vehicle parts are draining the finances of the country’s biggest regional electricity distributor.This is according to documents seen by Namibian Sun, which revealed the extent of Nored’s troubles - a situation which has prompted the company’s top leadership to enforce a range of organisational changes.The documents also revealed the mind-boggling scope of financial constraints at the electricity distributor. Scramble for moneyIn January this year, Nored’s executives had to scramble to raise N$8.9 million within three days in order to pay an outstanding balance on its NamPower account.This information is contained in an email written by Nored company secretary, Etegameno Indongo-Antindi, to the executive team.“We are doubting that we will be able to raise N$8.9 million over the weekend. It is against this background that we should apply for a temporary facility of N$8 million,” Indongo-Antindi wrote.This came less than two months after the board had sanctioned the executives to obtain a N$4 million bank facility on 11 November 2023 in order to pay salaries.The extensive internal communications also describe how the use of counterfeit car parts are placing additional pressure on Nored’s finances, limiting its ability to fund important maintenance and refurbishment projects.The company has attributed the ‘extremely high&#039; maintenance cost of its fleet on poor-quality parts used by service providers.In one instance, it was found that Northern Electric and Mechanical Auto Repairs charged Nored N$27 358 for the supply and installation of a Toyota GD6 2.8 power-steering rack in 2020. Surprisingly, this year, it quoted Nored N$12 000 for the same job.This is despite the average price from verified Toyota dealer agents that supply the parts to merchants being N$30 000 for the power-steering rack alone.This reduced amount of N$12 000 was allegedly a counter-quotation to another service provider, who quoted N$43 000.Fake partsIn an email dated 29 February, Nored’s manager for technical services Petnen Frans directed the company’s internal auditor, Victor Vatuva, to probe the suspected usage of counterfeit parts on Nored vehicles by Northern Electric and Mechanical Auto Repairs.Frans suspected that the low prices are possible because some service providers use counterfeit parts.“Counterfeit/pirate parts drives high maintenance costs due to the higher failure frequency rates of parts, as compared to genuine parts from dealers. The maintenance cost analyses graph indicates that the same merchant that provided the suspected counterfeit parts drives Nored’s high maintenance costs due to higher maintenance frequency rework repair costs,” Frans noted in his email.Vatuva was also asked to probe what happens to old tyres that are replaced on Nored vehicles, and where they are kept. Other aspects to be investigated included the “suspicious inflated payments for counterfeit parts”, and the fleet controller&#039;s suspected unethical conduct to get merchants to lower their prices.The electricity distributor’s fleet controller, Seldene Steenkamp, defended the use of Northern Electric and Mechanical Auto Repairs, saying despite providing a cheaper quotation, they have a “proven track record of delivering quality products and services to Nored over the years”.“The vehicles are not under warranty any more. We are supposed to source at least three quotations and consider the most cost effective one with quality services. We can have confidence in their ability to meet our needs and provide excellent service. Therefore, I recommend that we choose the cheaper quotation for our fleet’s procurement needs,” she said.New controlsNored has since put measures in place to ensure that costs are contained.Earlier this week, the company’s acting CEO Toivo Shovaleka, in an internal memo, announced several organisational changes to staff members.“The fleet management department is moved from technical services division to finance and ICT; and the fleet controllers will report directly to the finance manager,” he wrote.Shovaleka also announced that the safety, health and environment (SHE) department will move from the technical services department to the human capital department.

In the red: Nored living hand to mouth

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Namibian Sun 2024-11-22

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In the red: Nored living hand to mouth

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Namibian Sun 2024-11-22

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