NAC bosses take home company vehicles for N$5 000 each

Eighteen Namibia Airports Company (NAC) executives and managers bought company-owned vehicles under a board-approved scheme after paying N$5 000 to transfer ownership.

Documents seen by Namibian Sun show that the scheme allowed executive vehicles to depreciate to a book value of zero over five years before ownership could be transferred to beneficiaries.

The scheme benefited current and former executives and managers, including NAC chief executive officer Bisey /Uirab, former general manager for commercial services Toska Sem, chief legal advisor Lot Haifidi, manager for risk management and quality assurance Angela Sibalatani, executive for infrastructure development and asset care Ralph !Gaoseb, Johan Smit, Leonard Shipuata, Titus Shungula, Erastus Shapela, Petrus Shippale, Jason Kweyo, Veronica Fiswa, Alex Angula, Justin Strauss and Josephine Soroseb.

Vehicles allocated under the scheme included Toyota Land Cruiser 200s, Land Cruiser Prados, Land Cruiser V8S, Volkswagen Amarok V6s, a Range Rover Evoque, a Jeep Grand Cherokee, a Ford Everest, a Toyota Hilux and a Mercedes-Benz GLC. Executives also received fuel allocations of up to 400 litres per month.

Contractual benefits

/Uirab confirmed the transfers to Namibian Sun, saying the N$5 000 fee formed part of an agreement reached with affected employees when NAC abolished the vehicle scheme in 2021.

He said employees participating in the scheme enjoyed contractual vehicle benefits and were entitled to replacement vehicles every four years.

"The employees were entitled to utilise the allocated vehicle for a period of 48 months. At the end of that period, they were entitled to a replacement vehicle," he said.

/Uirab said the original policy allowed employees either to purchase their allocated vehicles at 20% of the original purchase price or return them to the company.

"The policy further provided that the relevant employee had an option to purchase the vehicle at the end of the 48-month cycle, if they were so inclined, in accordance with section 3.1(h) of the policy at 20% of the original purchase value or return the vehicle to the company," /Uirab informed Namibian Sun.

NAC abolished the Vehicle Scheme and Allowance Policy in March 2021 as part of a broader transition to a total cost-to-company remuneration model.

"Abolition of this policy implied changing the employment conditions between the company and the affected employees," he said.

"Transitioning to the total cost-to-company remuneration model meant that NAC was taking away the affected employees' contractual benefits pertaining to vehicles, hence there was a need to find a solution that would be mutually agreeable between the company and the employees."

According to /Uirab, NAC subsequently entered into agreements with affected employees to terminate the vehicle benefits and transfer ownership of the vehicles to them.

The company maintains that the transfer agreements flowed from rights already embedded in the vehicle benefit scheme and formed part of a negotiated process following the abolition of the policy.

The company says the decision to abolish the scheme has generated savings of approximately N$6 million annually since 2021.

Ministerial investigation

The executive vehicle scheme is among the matters investigated by the Ministry of Works and Transport following allegations of governance irregularities at the state-owned enterprise.

Investigators examined how vehicles were transferred to executives and managers after being depreciated to a book value of zero and subsequently transferred to beneficiaries under the scheme.

A report seen by Namibian Sun alleges that the mechanism used to determine the vehicles' value was not supported by an accounting policy or a recognised accounting standard.

"The depreciation value of N$5 000 was determined without an accounting policy, and the provision for vehicle depreciation contained in the Motor Vehicle Allowance and Car Scheme Policy is not based on an accounting standard," the report states.

The investigation also concluded that NAC allegedly failed to obtain Treasury approval before disposing of the vehicles.

"NAC did not seek Treasury approval to alienate the vehicles as per section 18 of the State Finance Act," the report found.

The findings raise questions about whether vehicles that still retained significant market value should have been transferred under a mechanism that reduced their book value to zero before ownership passed to executives and managers.

NAC denies findings

NAC rejected the findings and argued that investigators had fundamentally misunderstood the nature of the arrangement.

The company maintained that the N$5 000 was merely an administrative fee associated with the transfer of ownership following the abolition of the vehicle scheme and not the value or purchase price of the vehicles themselves.

NAC further argued that employees participating in the scheme had accrued contractual rights to vehicle benefits and that the transfers formed part of a negotiated process to convert those benefits into a total cost-to-company remuneration model introduced in 2021.

The company also said the original vehicle scheme already provided employees with the option to acquire their allocated vehicles at the end of the benefit cycle, meaning the eventual transfer of ownership flowed from rights embedded in the policy rather than a special arrangement created when the scheme was terminated.

NAC further rejected the finding that Treasury approval was required, relying on legal advice that the State Finance Act does not apply to the company as suggested by investigators.