MBA stands in the way of Rukata's N$3m contract renewal

The NamPower board has, in principle, approved a new three-year contract worth N$3 million a year for its executive for generation, Gerson Rukata, giving him a final opportunity to obtain a master of business administration (MBA).

The contract would be terminated if he fails to obtain the MBA by November.

Board resolutions from a special meeting held on Tuesday last week show directors approved the recommendation to renew Rukata's contract from 2 November 2026 to 31 December 2029.

The board acknowledged that he had failed to obtain an MBA by the original deadline of 31 December 2023, a condition set when he was first appointed to the position in 2021.

The decision comes two weeks after Namibian Sun revealed that board records show Rukata's appointment in 2021 was subject to a condition requiring him to obtain either a master's degree or an MBA within two years of assuming office.

According to the original board resolution, directors amended the qualification requirements for the position by removing the requirement for a master's degree or MBA as a prerequisite for appointment.

“The required qualification is now a BSc degree and registration with the Engineering Council of Namibia. A master's degree or MBA should be considered as an advantage,” the documents stated.

The board, however, imposed an additional condition.

“The board further resolved that should the successful candidate not possess a master's degree or an MBA, he/she would be given a period of two years within which to obtain either a master's degree or an MBA.”

Rukata holds a bachelor of science degree in agricultural engineering from the University of Namibia.

NamPower defended the appointment at the time, citing his extensive experience within the organisation and his service in various technical and management positions across the utility.

Missed deadline

Board resolutions from last week's meeting, seen by Namibian Sun, show directors discussed Rukata's failure to obtain the stipulated qualification.

“The executive generation did not meet the requirements of the board decision to obtain an [MBA] by 31 December 2023," the resolutions state, also noting management's failure to ensure compliance with the 2021 contract.

The resolutions further noted that the board had lowered the qualification requirement for the position to a bachelor's degree in engineering, and that obtaining an MBA was neither included in Rukata's new employment contract nor a condition for the contract renewal.

“The failure by management to initiate the end-of-contract process timeously to meet the six-month notice period as per the employment contract of the executive generation... ” the document adds.

Despite the concerns, the board approved managing director Simson Haulofu's recommendation to renew Rukata's contract for a further three years.

Sources indicate Haulofu signed Rukata's renewed employment contract last Tuesday, formally giving effect to the board's decision.

The meeting, chaired by lawyer Clive Kavendjii, was attended by Paulina Elago, Silke Hornung, Evat Kandongo, Shimweefeleni Hamutwe, Ralf Tobich and Martha Mbombo.

Second chance

The renewal, however, comes with conditions.

Rukata must obtain his MBA on or before 2 November, submit a draft NamPower Generation Master Plan at the next board meeting and develop a strategy to address delays affecting generation projects.

The board further resolved that failure to comply with the conditions would result in the automatic termination of his contract.

“In the event that the conditions for the renewal are not met timeously, the employment contract of the executive generation will automatically terminate,” the resolutions state.

Kavendjii last week confirmed that the board had met but declined to discuss matters considered during the meeting.

“I can confirm that, yes, we had a board meeting, but I'm not at liberty to discuss the agenda of the meeting with the media. It is really unethical and, as a matter of governance, it is not supposed to be like that,” Kavendjii said last week.

“If we are to openly discuss agendas of board meetings, then we might as well do it publicly. Some of these details involve people's confidential information, and we can't just divulge them,” he added.

Rukata's remuneration package is understood to be worth approximately N$3 million annually, translating to about N$251 000 per month.

Sources further claim that his benefits include post-retirement medical aid, a benefit reportedly not extended to other executives within NamPower's Grade 3 category.

Disciplinary action

The board resolved that Haulofu should initiate disciplinary proceedings, within 30 days, against the executive responsible for human capital, citing management's failure to initiate the end-of-contract process and to ensure compliance with the earlier MBA requirement.

“The board noted with great dismay the failure by management to initiate the end-of-contract process timeously to meet the six-month notice period as per the employment contract of the executive generation," the documents read.

“Management failed to follow up and ensure compliance with the board decision of 03 December 2020, requiring the executive generation to obtain his MBA by 31 December 2023."

Namibian Sun attempted to contact Rukata telephonically and left a message requesting comment, but no response had been received by the time of publication.

Questions were also sent to NamPower last week through its spokesperson, Tangeni Kambangula, seeking comment on the board's decision. No response had been received by the time of going to print.

The contract renewal comes as the Ministry of Industries, Mines and Energy has authorised the NamPower board to begin recruiting for a new managing director ahead of Haulofu's contract expiry on 31 December.

Haulofu (65) was appointed managing director in 2016.