Oil trading ‘collusion’ at Namcor

Embattled national oil company Namcor says a conspiracy which led to one of its subsidiaries being owed N$266 million - more than N$250 million above the authorised credit limit - could not have happened without collusion on the part of its employees.These details were laid bare in court papers filed in the ongoing Windhoek High Court case in which the subsidiary, Namcor Petroleum Trading and Distribution, wants the court to sanction the liquidation of Erongo Petroleum.According to an agreement between the two entities signed on 20 September 2020, Erongo Petroleum was only entitled to a credit line of N$15 million, and how it managed to get fuel products to the value of N$266 million still remains a mystery to the board. Namcor insiders alleged that the transaction involved senior officials who acted contrary to the best interests of the company and wantonly contravened its policies and procedures.There also exist claims that some employees perfected ways to receive kickbacks from vendors, which were difficult to trace directly to their bank accounts.Employees ‘cajoled’Former board member Engelhardt Kongoro said the bypassing of credit policies is a ‘grave concern’ at the parastatal.“The credit limit, according to the credit agreement, is N$15 million. It is unfathomable and defies belief that [Erongo Petroleum] somehow managed to cajole employees of [Namcor] to obtain petroleum products far exceeding the credit limit,” he said in court papers dated 17 April. Kongoro is no longer part of the board following the appointment of a new board last month.He added: “The fact that [Erongo Petroleum] was permitted to run up a debt which is more than 15 times the credit limit... simply smacks of collusion between [Namcor] employees who permitted such a debt to be incurred by [Erongo Petroleum].”Kongoro is adamant that Erongo Petroleum’s failure to pay its debt and its subsequent refusal to do so confirms that there was collusion.‘Scandalous’In his answering papers, Erongo Petroleum’s sole member Austin Elindi labelled Kongoro’s collusion claims as 'scandalous' and further denied that his company owes Namcor N$266 million.“I deny that all the statements made by the deponent are true and correct. In fact, the papers contain scandalous content which does not provide a factual basis for seeking winding-up relief on just and equitable ground,” he said.Elindi said he met with Namcor officials on several occasions to discuss repayment proposals, after which a repayment plan was transmitted. “They never reverted on their stance as to the proposed plan, despite them having initiated the same.”In a letter dated 17 July 2023, Erongo Petroleum wrote to Namcor proposing to make monthly payments of N$4 million for 48 months in order to settle its debt.The private petroleum trading firm also wanted Namcor to allow it to “trade strictly on a cash basis as from July 2023”.Debt financingElindi further indicated that, in June, he was in consultation with Standard Bank Namibia and United Kingdom-based financier 51 Dominance Capital. The financier deals with the design, development and execution of corporate debt issuance in the form of asset-backed or insured fixed income notes. Elindi said the “major financial capital investment” process between Erongo Petroleum and the two financial institutions will be prejudiced if his company is liquidated. Namcor, however, maintained that Elindi’s company should not have racked up debts it cannot repay.“The investment agreement with 51 Dominance Capital, if it exists, is of no moment. [Erongo Petroleum] does not say that the money will be availed to repay its debts. It rather seems to be an attempt to recapitalise [Erongo Petroleum]. There is no indication how the debt will be paid,” Kongoro said.He asserted that recapitalisation is not an excuse for liquidation not to take place. “The contravention of [Namcor’s] policies was blatant and unconscionable. The debt incurred is unprecedented and could not have happened without collusion on the part of employees of [Namcor]. It is now clear that [Erongo Petroleum] is unable to pay that debt and has to be recapitalised,” Kongoro said.

Oil trading ‘collusion’ at Namcor

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Namibian Sun 2025-05-08

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Oil trading ‘collusion’ at Namcor

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Namibian Sun 2025-05-08

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