Namcor sues to close military fuel suppliers over N$380 million

The National Petroleum Corporation of Namibia (Namcor) has enforced legal action to shut down two military fuel suppliers to recover debt of over N$380 million.

The state-owned enterprise filed High Court liquidation applications in April this year against two companies – Erongo Petroleum CC and Enercon Namibia.

Erongo Petroleum owes Namcor N$266 million, while Enercon’s debt stands at over N$114 million.

Erongo Petroleum CC is owned by businessman Austin Elindi, who is also a shareholder in the controversial military fuel supply entity Enercon.

The two companies previously relied on credit to buy fuel from Namcor for reselling purposes, but have been unable to meet their repayment obligations.

“(Enercon) is a creditor for Namcor. (Enercon) has for more than 15 days after statutory demand was served on it failed to make any payment to Namcor,” Namcor’s legal representative, Engelhardt Kongoro, said in court papers dated 17 April.

Kongoro said evidence indicates that Enercon should be liquidated.

“Enercon is clearly unable to pay its debts. Furthermore, there is evidence of the abuse of corporate veil. Those who are running the affairs of Enercon are doing so recklessly,” he said.

Kongoro further said: “Enercon incur debts which they cannot pay or would not pay and further purport to sell assets which they know they cannot deliver, or in respect of which they cannot pass possession or ownership over to the buyer. These are reckless acts.”

Enercon is an entity of interest at Namcor.

Namcor took Enercon to court in 2023 for struggling to pay back around N$60 million to the national oil company.

Minister of finance and public enterprises Iipumbu Shiimi last year questioned why Namcor accepted a monthly repayment of N$500 000 from Enercon that received N$60 million in taxpayers’ money.

Enercon was paid between N$50 million and N$60 million in 2022 by Namcor in exchange for the fuel supply and related infrastructure deal with the Namibian Defence Force (NDF).

Enercon has a contract to supply fuel to the Namibian Defence Force.

Enercon was forced to reverse the agreement with Namcor due to objections from the military, but failed to repay the N$50 million to N$60 million immediately.

Shiimi wrote a letter demanding an explanation for transactions between Namcor and Enercon.

Enercon is owned by brothers Peter and Malakia Elindi, as well as military company August 26 Holdings.

Enercon chief executive Connie van Wyk yesterday told The Namibian that the company does not owe Namcor the alleged N$114 million.

“This amount is disputed by Enercon as evident in the court papers,” he said.

Enercon shifted the blame to mismanagement at Namcor.

“The debt was incurred because of Namcor and how it was being operated. Namcor suspended fuel supply to Enercon. Enercon entered into a settlement or repayment agreement, which Namcor today denies,” he said.

He said Namcor itself was under threat of being wound up.

“Namcor and its board are very much aware of the devastating consequences that awaits a company that is being wound up. Enercon, like any other company, employs people.

“These people are predominantly the breadwinners of their families. This would have a direct negative impact on the percentage of unemployment in the country,” he said.

Van Wyk said Enercon has maintained its obligations to all its stakeholders and is committed to putting up a fight against Namcor.

DROWNING IN DEBT

Elindi stated in court papers that the demand on which Namcor relies as precursor to the commencement of winding up proceedings is not a valid statutory demand.

“The relief premise is equally unsustainable. To the contrary, it is an ordinary demand which threatens recovery proceedings through legal action,” he said.

Erongo Petroleum wrote a repayment proposal to Namcor on 17 July 2023, saying they were willing to pay N$4 million per month to settle the debt over 48 months.

Kongoro said no payment was made to Namcor since 31 July 2023.

Namcor also says the liquidation process must go ahead, because Erongo Petroleum is unable to pay its debt as it also owes First National Bank about N$55 million and United Africa Group over N$100 million for unpaid oil supplies.

“There is no allegation that debt will be paid, or how and when it will be paid. Erongo Petroleum is clearly unable to pay its debts. Therefore, based on the respondent’s [Austin Elindi’s] version, Erongo Petroleum stands to be wound up in the hands of the Master of the High Court,” he said.

Erongo Petroleum is also an entity of interest to Namcor.

The Namibian reported in April that former Namcor commercial manager Olivia Dunaiski has been hired by Erongo Petroleum, a company she is accused of irregularly approving transactions worth around N$28 million for while she worked at the national oil company.

The Namibian understands that Erongo Petroleum had a credit limit of N$15 million, yet Dunaiski, with other former Namcor managers, allegedly approved oil deals with the company worth over N$28 million.

“It is unfathomable and defies the belief that Erongo Petroleum managed to cajole employees of Namcor to obtain petroleum products, far exceeding the credit limit,” said Kongoro.

After Namcor launched an investigation, Dunaiski, with other managers, subsequently resigned.

Dunaiski got the job at Erongo Petroleum late last year.

At the time of leaving Namcor, Dunaiski was acting as an executive for sales and marketing.

Namcor spokesperson Utaraa Hoveka yesterday said since the matter is sub judice the company is not at liberty to comment.

“As you are aware this matter is before the courts for judicial adjudication,” he said.

Elindi did not reply to questions sent to him.

‘UNHOLY ALLIANCE’

Last year, Namcor took legal action against a company tied to businessman Peter Elindi and retired brigadier general James Auala in an attempt to recover N$53 million which the parastatal lost by buying storage facilities that already belonged to the government.

Peter and Malakia Elindi own 75% of Enercon Namibia, and the military, through its business arm August 26 Holdings, owns the remaining 25%.

In documents submitted to the High Court on 8 December, Namcor presented a case of fraudulent dealings that included ‘bogus’ valuations to justify the company paying N$53 million for an asset that belonged to the Ministry of Defence and Veterans Affairs.

Namcor is holding Enercon and three of its directors, retired brigadier general James Auala, Peter and Malakia Elindi, liable for the transaction.