Govt probe reveals 'free' NAC cars originally cost N$15m

A works and transport ministry investigation has revealed that 19 executives and managers who benefited from Namibia Airports Company's (NAC) controversial vehicle scheme received company-owned vehicles that were originally purchased at a combined cost of nearly N$15 million.

The findings come after Namibian Sun last week reported that senior NAC executives and managers took ownership of company vehicles after paying transfer fees of just N$5 000 each when the scheme was abolished in 2021.

NAC has rejected suggestions that the N$5 000 represented either a depreciation value or a purchase price, meaning the managers effectively received the vehicles for free.

The ministry's report, dated 7 April and seen by this publication, contains a detailed list of beneficiaries, the vehicles allocated to them, purchase dates, acquisition costs and the amounts paid when ownership was transferred.

Among the most expensive vehicles was a Toyota Land Cruiser allocated to NAC chief executive officer Bisey /Uirab, which was purchased in April 2019 for N$1.39 million.

Former general manager of commercial services Toska Sem received a Mercedes-Benz GLC350 bought for N$900 000, while the executive for human resources, Josephine Soroses, was allocated a Range Rover Evoque acquired for N$897 500.

Chief legal advisor Lot Haifidi received a Toyota Land Cruiser VX V8 that was bought for N$899 949, while executive for infrastructure development and asset care Ralph !Gaoseb and senior manager Leonard Shipuata were allocated Volkswagen Amarok 3.0 TDI vehicles purchased for N$863 359 and N$855 000, respectively.

Other vehicles listed in the report include Verengai Ruswa's Jeep Grand Cherokee valued at N$893 210, as well as Toyota Land Cruisers, Land Cruiser Prados, Ford Everests, Toyota Hiluxes and Isuzu KB300s allocated to executives and managers, including Sem Katoma, Jason Kweyo, Petrus Shipale, Justin Strauss, Alex Anguwo, Christian Faure and Angela Sibalatani.

Records show NAC spent approximately N$14.7 million acquiring the 19 vehicles between 2016 and 2019.

According to the investigation, the vehicles were ultimately transferred into the beneficiaries' names between 2023 and 2024 after each paid the N$5 000 transfer fee.

Governance concerns

The vehicle scheme became the subject of a ministerial investigation following concerns about the disposal of company assets and the circumstances under which ownership was transferred to employees.

The investigation, conducted by the ministry's chief internal auditor, Lineekela Joseph, found that executives and managers were allowed to take ownership of company cars after they had reached the end of their prescribed usage periods.

Investigators questioned the basis upon which the vehicles were disposed of.

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

The report further alleges that NAC failed to obtain the required 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."

Investigators also raised concerns over what they described as possible "misrepresentation by utilising termination of services to depreciate company motor vehicles for alienation".

According to the report, "on 21 September 2021, CEO /Uirab submitted a request to the board requesting approval 'to align the NAC vehicles and car scheme vehicle purchasing values to the depreciating values'".

It further notes that the board's human resources committee recommended that employees on Peterson bands D1 to F receive a 5% increase based on conversion values proposed by PricewaterhouseCoopers (PwC), effective 1 April 2022.

NAC defends transfers

In its response to the ministry, NAC rejected suggestions that the N$5 000 represented either a depreciation value or a purchase price.

"The amount was meant to cater for administrative costs of transferring vehicle ownership to relevant employees, and it is neither a depreciation value nor a purchase price," the company said.

NAC argued that affected executives had accrued contractual vehicle benefits through their employment agreements and that the transfers formed part of a negotiated process following the abolition of the vehicle scheme.

The company further maintained that the vehicles had fully depreciated in accordance with applicable accounting standards.

"All vehicles, except for two at the time of disposal, were five years old and had fully depreciated. The disposal value of these vehicles was N$1 each when disposed of," NAC said.

The company's response was submitted to works and transport minister Veikko Nekundi on 19 May.

Records show that four of the vehicles were purchased in 2016 at a total cost of N$3.1 million, five in 2017 for N$3.5 million, four in 2018 for N$2.5 million and six in 2019 for N$5.6 million.