Managers oppose plan to bloat NHE executive

According to Baisako, NHE needs a bailout of N$1.56 billion from government over the next three years to shore up its depleted balance sheet and to stay afloat.
Cindy Van Wyk
STAFF REPORTER









WINDHOEK



Senior managers at the country’s embattled housing parastatal have questioned why the board wants to appoint another executive to oversee only four staff while the company finds itself in a financial predicament.

National Housing Enterprise (NHE) information technology and business systems manager Chris Baisako said the decision to recruit another executive, who will manage only four employees in the human resource department, came at a time when the board tasked management to devise a turn-around strategy to improve the financial position of the company.

NHE currently employs around 130 employees.

“How does one justify employing a senior manager to oversee a business unit of four people? Added to that, NHE had a similar position before but was abolished because of the same reason, the top-heavy structure of this small company,” he questioned in a document sent to board chairperson Sam Shivute on 14 January.

At least two other managers who spoke to this publication, on condition of anonymity, also indicated that the move is “ill-advised” and that the company can simply not afford a top-heavy structure.

In the document, Baisako said: “Many of us were in utter shock to learn about this plan, especially in light of the fact that we were discussing ways of reducing operational expenditure where the salary bill is the biggest contributor”.

He said the motivation behind creating the position was not known to some of the senior employees and that the dire financial situation of NHE only became clear to many of the staff members during the process of finding solutions to the financial crisis.



Troubled

“Be that as it may, given the current financial distress the company is finding itself in, I am of the opinion there is no justification in creating a position of that nature,” he wrote.

According to Baisako, NHE needs a bailout of N$1.56 billion from government over the next three years to shore up its depleted balance sheet and to stay afloat.

He added: “For those with a basic understanding of business and finance, it becomes clear that the future existence of NHE is under serious threat. Based on the information that was presented, the days that NHE may not be able to meet its obligations are not very far”.

According to Baisako, the finance department has indicated that the company may not be financially viable in a year’s time.

He also said the failure to grow the company’s loan book - which funds NHE’s operations - is haunting the finances of the entity.



‘Totally contradictory’

“As per section ‘28.1 Management Opinion on Going Concern’ of the 2020/21 budget note, NHE requires capital injection of N$520 million per annum over the next three years by the shareholder in order to continue operating as a going concern for a foreseeable future.

“Knowing the tight fiscal space the government is operating under, this required injection is unlikely to materialise, putting more pressure on the sustainability of the business,” he said.

He added: “In light of the aforementioned, I find it totally contradictory that the same management submitted a proposal to the board which increases the operational expenditure of the business by more than a million dollars (annually) and that the board approved such a proposal.”

“I found it appropriate to put my concerns to the board in writing and also hereby disassociate myself from that submission that may have originated from management for board approval,” he concluded.

Shivute, when contacted for comment, said: “I have no comment on your rumours”.

“I told you that the board will give a statement after our meeting. Please allow me to focus on what I am preoccupied with,” he said.

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Namibian Sun 2024-03-29

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