Air Namibia board resigns, blasts Jooste

04 February 2021 | Transport

OGONE TLHAGE



WINDHOEK

Less than a week after committing Air Namibia to a last-ditch settlement agreement worth N$178 million, which the shareholder claims to not have endorsed, all four of the national airline’s board members tendered their immediate resignations yesterday.

They are Escher Luanda, Heritha Muyoba, Willy Mertens and presidential pilot Alois Nyandoro.

Last Friday, the board reached a last-minute settlement agreement with Belgian company Challenge Air, which applied to the High Court for the liquidation of Air Namibia.

As part of that deal, the national airline has two weeks to cough up N$104 million.

Air Namibia will then pay monthly instalments of N$12.1 million until January 2022.

At the end of the payment period, the airline will have paid about N$226 million.

Both the ministers of finance and public enterprises said they were not privy to the content of the settlement agreement and did not consent to its granular details.

But prior to resigning late yesterday, the board had earlier issued a sharp-worded public statement in which it accused government of sidestepping it in key decisions.

The board said it had proposed a slim operating model that would avoid the likelihood of liquidation while also preserving the jobs of at least half its workforce.

Challenge Air filed for the airline’s liquidation over a debt of N$175 million stemming from a cancelled lease of a defective Boeing 767 aircraft Air Namibia had leased in 1998.

Air Namibia’s board said government - through the public enterprises ministry - made its fiduciary duties hard to execute.

“The board has, over a significant part of its tenure, had to endure the usurping of its functions by the state as shareholder, which is not consistent with sound state-owned enterprise governance,” the statement read.

Interference

According to the board, government bypassed it to directly engage employees and trade unions, and negotiated contracts without its knowledge.

Government reportedly also procured advisory services on behalf of the company and managed the appropriated budget earmarked for the company without the involvement of the board, it said.

The Air Namibia board also questioned why the ministry withheld N$948 million in funding availed to the national carrier, adding that no brief was provided on how the money should be allocated other than a monthly allocation for employee salaries.

“These are unfortunate instances that fly in the face of good corporate governance and have made it extremely difficult for the board to execute its fiduciary role,” it said.

Allegations challenged

Public enterprises minister Leon Jooste denied the board’s allegations.

“The ministry of public enterprises has not negotiated with employees or unions. Cabinet instructed the Cabinet Committee on Treasury (CCT) to engage the unions on potential future scenarios for the airline and this was done in a meeting where a number of CCT members was present and the meeting was in fact chaired by the minister of finance as the chair of CCT.

According to him, the ministry could further not withhold funds from Air Namibia unilaterally and can only do so in consultation with Treasury.

“An appropriate restructuring will be done in the best interest of the state,” he said.