Israeli dribbles C-Sixty in diamond deal

OGONE TLHAGE







WINDHOEK

A fallout between local diamond valuation outfit C-Sixty Investments and its Israeli technical agent has led to the company nearly being stripped of its lucrative multimillion-dollar contract by government, before the same agent bought out the local partners to secure the contract for himself.

C-Sixty, a sanitation outfit owned by Swapo businessmen John Walenga and Tironnen Kauluma, had Nuska Technologies as its technical partner for a job to evaluate diamonds of state-owned Namdia.

Nuska, run by Israeli national Doron Cohen, has since been accused of going behind C-Sixty’s back by approaching mines minister Tom Alweendo with a proposal to take over the diamond valuation contract.

This move infuriated the C-Sixty bigwigs, leading to a fallout with Cohen, who then bailed on C-Sixty with all his technical equipment – leaving the local sanitation outfit unable to continue with the valuation contract.

With government threatening to end its contract with C-Sixty for no longer being able to honour its contractual obligations, C-Sixty entered into negotiations with Cohen to buy the local partners out.

Originally, C-Sixty was backed by Israeli company Sarine Technologies’ valuation technology to do work for Namdia – which is to determine the prices of diamonds. Nuska is the local agent for Sarine Technologies.

Trouble brewing

The rift between Nuska and C-Sixty was thrust into the spotlight yesterday when Windhoek mayor Job Amupanda released invoices submitted by Nuska to the mines ministry for payment.

The N$3.4 million invoice - dated 18 March - was for the valuation of diamonds worth just under N$120 million, a process that was completed within five days.

Namibian Sun understands trouble between the two entities started brewing in July 2020 when Cohen approached the mines ministry behind his partners’ backs in an attempt to replace them.

Cohen on 6 July 2020 submitted an unsolicited proposal to the ministry offering diamond valuation services.

The ministry responded two days later informing him that his proposal was declined.

“We have studied your unsolicited proposal submitted to our office. Despite that the proposal strives to address [government] valuation needs on a cost-effective manner, we regret to inform you that your proposal could not be entertained at this moment,” wrote diamond commissioner Miina Gahutu in a letter dated 8 July 2020.

According to Gahutu, government at the time had valid contracts with two government diamond valuators to carry out diamond valuation and training of staff members of the ministry.

“Further, kindly take note that goods, works, consultancy and non-consultancy services by government offices, ministries and agencies are procured through applicable procedures under the Public Procurement Act,” Gahutu added.

Double blow

Upon learning that Cohen had approached the mines ministry behind their backs, Walenga and Kauluma allegedly clashed with the Israeli, which led to the working relationship being strained.

But while coming to terms with the fact that their technical partner was eyeing their contract, C-Sixty was dealt another blow just two months later when Alweendo wrote to Kauluma, who is the company’s managing director, informing him that the contract would not be renewed upon expiration.

A source familiar with the partnership said Nuska and C-Sixty cut ties shortly after Alweendo gave notice that the Namdia valuation would not be renewed when it runs out in September.

Upon learning that C-Sixty did not have the capacity to conduct valuations without Nuska, the mines ministry allegedly halted the valuation works and informed C-Sixty that the contract will be terminated if they fail to honour their contractual obligations, which includes manual and automated valuations.

“C-Sixty was stuck so they seemingly opted to sell their shareholding to Nuska as a going concern, which included debts over N$7 million. Nuska basically took over the contract,” a ministerial official, who chose to remain anonymous, said.

There are talks that the transfer of shares from Kauluma and Walenga to Cohen was meant to service debts owed by C-Sixty to Nuska.

Questions sent to Cohen on the series of events went unanswered, while Kauluma also kept mum on the state of affairs between the companies.

Namibian Sun previously reported that C-Sixty landed the contract after former mines minister Obeth Kandjoze and former attorney-general Sacky Shanghala exercised their powers to commit Namdia to C-Sixty without going on a public tender.

Walenga is a former member of the Swapo central committee, while Kauluma is the nephew of former Cabinet ministers Helmut Angula and recently sacked Peter Vilho.