… As trade ministry ropes in AG to recover money
By Eliaser Ndeyanale
THE Ministry of Industrialisation, Trade and SME Development is battling to recover N$1.7 million it paid to a supplier in 2014 to procure modern hi-tech silk manufacturing equipment for a small and medium-sized enterprise (SME) under its Equipment Aid Scheme, which would have resulted in the creation of 800 jobs.
The equipment was supposed to have been procured by Namibia Paints & Tools and was destined for Kalahari Wild Manufacturers, but despite the ministry paying, the machines never arrived.
Namibia Paints & Tools owner Herbert Ermann is now claiming that a deal between him and a Chinese company, to buy his business, had gone sour in 2014, and that he cannot honour the agreement with the ministry, as his firm is now insolvent.
Documents in possession of Confidente show that the ministry wrote to Kalahari Wild Manufacturers owner Veronica Nunuhes on 2 July 2014, to inform her that she would be assisted under the Equipment Aid Scheme.
The equipment, which was to be procured through Namibia Paints & Tools, included a loom, beam winder and creel worth N$241 860, a single loom worth N$195 200, two carding machines valued at N$420 420, 10 spinning wheels worth N$176 300, fibre opening machines worth N$136 640 and six table looms valued N$125 760.
Other machinery on the list were a N$57 100 freight fibre opening machine and solar heating system for hot water worth N$88 580.
The quotation also included freight charges from South Africa to Leonardville in Omaheke region, totalling N$68 120, as well as travel and accommodation for the training of three staff members in South Africa, quoted at N$30 000.
The payment was paid to Ermann’s company on 30 July 2014. However, when the equipment was not supplied, Nunuhes contacted the ministry.
The ministry replied on 15 July 2015, by saying, “We wish to inform you that we have been informed by Mr Herbert Ermann that his company Namibia Paints & Tools cannot honour the delivery of the requested equipment. Mr Herbert Ermann informed this ministry that during the time that the ministry purchased the equipment from Namibia Paints & Tools he had sold the company to a Chinese-based company.
“It, however, turned out that the Chinese company did not honour its obligations of settling all liabilities/private engagements of Namibia Paints & Tools. As a result of the breach of the contract by the Chinese company, Namibia Paints & Tools informed this ministry that it cannot honour its obligation to deliver the equipment on time to the ministry.
“In an attempt to solve this matter, the ministry had a meeting with Mr Herbert Ermann, who requested to be given a reasonable time to carry out the necessary legal and financial obligations towards the company. Although we have given Mr Herbert Ermann an opportunity to deliver the machines as soon as possible, and we sympathise with you, we are requesting you to be patient with us, as we try to find an amicable solution to this problem.”
Asked why the company has not been delivered the tools, Ermann he said this week that he had sold the business to Qhopahosine, a company owned by a Chinese citizen Qiuxing Liao, in 2014.
However, the deal went sour and the company is now insolvent, and cannot honour the delivery of the requested equipment.
“There is no possibility for us to deliver those machines, because the company has now gone into liquidation,” he told Confidente.
Nunuhes said she is waiting for response from the ministry and could not comment further on the matter.
Ministry of Industrialisation, Trade and SME Development Deputy Permanent Secretary, Dr Michael Humavindu, said matter had been now referred to the Office of the Attorney-General (AG), in an attempt to recoup the money.
“I started communicating with him (Ermann) in June 2015, and we have given him enough to deliver the equipment. These are public funds, and therefore the matter is now in the hands of the AG,” Humavindu said.
Confidente. Lifting the Lid. Copyright © 2015