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Damning audit causes shivers at Air Namibia

Mon, 6 July 2015 03:08
by Tiri Masawi
News Flash

A bitter wrangle has ensued between the Air Namibia Acting Managing Director Rene Gsponer and the internal audit sub-committee which The Villager understands handed a damning audit report to the new Minister of Works and Transport  Alpheus !Naruseb  for studying and conferment to the incoming board to remedy in their tenure.
The Audit Committee of Air Namibia which consist of Florette Nakusera, Elisie Eises and Erastus Hoveka have had a frosty relationship with Gsponer in the past few years.
The audit is said to contain findings of gross irregularities and has somewhat incriminating findings against the members of the outgoing board and some senior managers at the national airliner. The Villager understands the audit zoomed into the employment of expatriates and also touched on why the MD increased the salaries of some few managers by between N$10 000 and N$20 000 late last year.
Although it is not clear whether Minister of Works will renew the tenure of the Haroldt Schmidt board or appoint a new one The Villager understands that Gsponer was furious over why his audit team handed the document to the minister’s office without consulting him as the most senior manager in the absence of the board whose term expired.
The Villager understands that Gsponer confronted his audit team last week seeking explanation on why they did not give him the audit report as he is the deciding manager in the absence of the board whose mandate lapsed end of June this year.
Investigations by The Villager also confirm that the Air Namibia Audit Committee was equally divided over the legality of their mandate to discuss the audit report and Nakusera and Eises were adamant that the right thing to do was to hand over the findings of the audit report to Works and Transport Minister on Friday morning.
The report investigated various irregularities which ranged from that Gsponer abused his authority as Acting MD to give Michelle Heitha and British National, Kate du Plessis [married to a South African National] a unilateral unapproved N$10,000 increase for each of them since August 2014. In April 2015, he increased their salaries with another N$10,000 and this has sparked discontent amongst the staff of Air Namibia.
The audit report also investigated accusations that Gsponer was only interested in hiring expatriates as adhock pilots. Sources said that Air Namibia has close to 50 adhock pilots and none of them are paying Income Tax to the Namibian Receiver of Revenue.
 Engagement by The Villager with a board member who spoke on anonymity however showed the entire board is also not aware of the decision by the Hoveka chaired audit committee to submit the report to the minister.
The Board member told The Villager that while the board subcommittee on audit have been busy with their report it is against corporate governance for them to approach the minister bypassing the Acting MD and the board. According to the board source the correct procedure was to inform both the Acting MD and some board members who were implicated in the report to have their opinion as they are interested parties.
The board sources also reckons that if the current minister received the report he should revert back to the management and board before he looks at it as his mandate is not catered for in such matters as a shareholder. The board source also reckons that the minister as a shareholder can only be consulted by the board and the management if need arises. It also remains a mystery whether the board had interest in the report or not.
Meanwhile responding to the issue Hoveka told The Villager that an initial meeting was scheduled for last week to engage the MD and the board on the way forward and also to share the findings of the audit.
“Reality is that it is not imperative for the company to share the report with the minister before the interested and implicated parties are informed of the findings. According to corporate governance structure we are supposed to inform the board and the implicated of the findings. It is also unfair to talk about someone in to the shareholder before they are told about it.
“I also understand that there is going to be a meeting this week to discuss the issue and I strongly believe the findings in the report do not warrant the minister’s attention and it is something that management can look into differently,” Hoveka said.
Meanwhile Air Namibia Spokesperson Paul Nakawa said,  “I confirm that the Board’s term has come to an end on 30 June 2015. For policies and governance our line Ministry of Works and Transport is currently in charge, and all enquiries related to that should be referred to the Ministry through the Ministry Spokesperson. Audit Team of Air Namibia reports directly to the Audit Committee in the Board of Directors whose term has expired, therefore by way of protocol and courtesy I cannot entertain questions related to that as I do not have the mandate to do so. With the absence of the board at the moment, there is no vacuum in governance as the Ministry is overseeing that. Please consult and talk to the Ministry,” he said.