MTC deal approved without key documents

THE Communications Regulatory Authority of Namibia (Cran) approved the buying of MTC shares worth N$2,3 billion from a foreign company, despite concerns that key Cabinet documents were not submitted when the transaction was finalised by the regulator.

This was revealed in documents submitted by Cran’s management to the board two weeks ago when the communications entity approved the sale of MTC shares.

The Cran board approved the transaction, despite warnings from their management that the transaction would be unlawful.

The government owns 66% of MTC through the Namibia Post and Telecommunications Holdings (NPTH) while Luxembourg-based Samba Luxco SARL owns 34% shares.

NPTH now wants to buy Samba Luxco’s 34% shares that are worth N$2,3 billion, and which will be partly financed by the Government Institutions Pension Fund (GIPF).

Cran, as a regulator, rejected that transaction last year because of several concerns, such as the future of MTC, and that the shares could be shifted into the hands of private investors.

One of the key conditions raised by Cran last year when it rejected the MTC deal was that MTC should be partly owned by private or local investors who will control the management, as well as provide technological and technical support to the company.

Documents seen by The Namibian show that instead of amending their proposal as requested by Cran, the NPTH board, led by businesswoman Ally Angula, wrote back to the regulator on 7 December last year, appealing the rejection and playing down most of the concerns by Cran.

Cran responded by requesting Cabinet documents which approved the government’s plan and timelines for the proposed future ownership of MTC shares.

Cran said they only received the Cabinet decision made on 24 October 2017 after their demand for documents.

The regulator said they never received copies of Cabinet decisions made on 6 December 2016 and 14 February 2017.

Cran also pointed out that the Cabinet decision of 24 October 2017 was dated November 2017, a date after the communications regulator requested the documents.

NPTH did not explain why the two Cabinet decisions have not been submitted, although they strongly argue in their appeal that consideration of those two decisions would have in all likelihood assisted the authority in arriving at a different decision, Cran said.

“The onus is on the petitioner (in this case Cran) to ensure that the information they submit is accurate, and cannot hide its inefficiency by saying the authority ought to have checked and pointed out the discrepancy,” the regulator added.

Cran also said NPTH provided no guidance on the future of the transaction.

“The authority (Cran) was informed that the Cabinet submissions are either confidential or not yet available, and therefore, the authority was not able to fully consider the future transaction,” the regulator said.

Festus Mbandeka, Cran chief executive officer yesterday said they have received the relevant outstanding documents during February for the purpose of considering the petition.

“The authority is not aware of any other outstanding documents to be received from Cabinet,” he said.

Mbandeka’s statement is contrary to his board submission, which he compiled on 28 February 2018, for a board meeting on 5 March 2018.

NPTH’s lawyers responded on 20 February 2018, saying that there was a Cabinet letter dated 24 October 2017 which indicated that Cabinet approved the proposed funding model.

NPTH said they would get N$1,5 billion from GIPF and N$800 million from their own money in order to buy the N$2,3 billion worth of shares from the foreign company which currently owns MTC.

This will mean government will now own 100% of MTC, and then offload 20% to GIPF, while another 29% will be invested on the Namibian Stock Exchange (NSX).

The decision to approve the transaction comes at the time when there are concerns of political pressure to sell the MTC shares to benefit well-connected individuals, who are either set to be brokers or owners of the company.

There is also a blame-game unfolding at Cran. understands that the Cran board is blaming their management of flip-flopping in their recommendations to the board. The management is blaming the board for putting pressure on them.

Documents show that although the Cran management provided detailed doubt about the selling of the MTC shares, they still recommended the transaction to go ahead.

It’s the same management which warned the Cran board that the MTC transaction, in its current form, would be unlawful.

The battle for MTC intensified last August when former information minister Tjekero Tweya removed businesswoman Angula as a director of NPTH.

“The acts you have committed, and such acts brought about the distrust and therefore, as the appointing authority, I view such behaviour as unacceptable,” Tweya said at the time.

However, President Hage Geingob directed Tweya to reinstate Angula at NPTH, which Tweya did. As NPTH chairperson, Angula, who is a close friend of the Geingob family, heads negotiations for the MTC deal. She told The Namibian last year that she was proud of her work at NPTH.