Werner Menges
15 December 2011
A contract which former Namibian Broadcasting Corporation Director General Ben Mulongeni signed ten years ago without the approval of the NBC’s board of directors was against the national interest and cannot be enforced, it was ruled in a judgement of the High Court this week.
The contract was against public policy and thus cannot be enforced, Judge Elton Hoff stated in a judgement delivered in the High Court in Windhoek on Tuesday.
“It is a contract which was the product of the arbitrary use of power by the Director General of the NBC. It is a contract which came to exist mainly because of the non-compliance with tender regulations,” Judge Hoff remarked.
He also stated: “I accordingly do not have the slightest hesitation in declaring the NBC/Factcrown contract as being against public policy and thus unenforceable.”
Judge Hoff made the remarks in a judgement in which he gave reasons for a ruling which he had made in a case between Factcrown Limited, which is a company registered in the United Kingdom, and the NBC in May this year. In that ruling, Judge Hoff dismissed Factcrown’s case against the NBC with costs.
Factcrown has since filed an appeal to the Supreme Court against Judge Hoff’s ruling.
In its case against the NBC Factcrown was asking the High Court to order the public broadcaster to implement a contract which Mulongeni signed with Factcrown on December 12 2001.
In terms of that contract, the NBC was due to buy broadcasting equipment from Factcrown at a total cost of US$12 million.
At that time, the NBC was expanding its broadcasting network to cover areas of Namibia which previously did not receive television or FM radio signals.
The agreement with Factcrown was supposed to replace a ten-year contract which Mulongeni had signed with a British subsidiary of Harris Corporation, which is an American manufacturer of broadcasting equipment, on January 29 2001. In terms of the agreement between the NBC and Harris Corporation the latter was due to supply broadcasting equipment to the NBC at a total cost of US$11,5 million.
The contract with Harris Corporation was signed after that company’s tender for the supply of the equipment had been accepted by the NBC’s tender committee and its board of directors.
During the hearing of the case in June last year and May this year Judge Hoff was told that the NBC board had given specific instructions to Mulongeni that the agreement between the NBC and Harris Corporation had to be honoured, and that he could not conclude an agreement with another company without the board’s approval.
The evidence before Judge Hoff also indicated that at the time the contracts with Harris Corporation and Factcrown were signed the NBC was a hotbed of intrigue in which Mulongeni, the rest of the NBC’s management, and the board of directors were often at odds.
In minutes of a board meeting which took place on September 10 2001 it was recorded that the board had unanimously adopted a vote of no confidence in Mulongeni. His handling of the contract with Harris Corporation was cited as one of the worst examples of his alleged lack of control over the affairs of the NBC.
When the contract with Harris Corporation was signed that company was represented in Namibia by a Nigerian businessman, Setima Benebo.
The relationship between Benebo and Harris Corporation however fell apart during 2001, apparently regarding commission that was due to Benebo, and Harris Corporation informed the NBC in writing in April 2001 that the company Factcrown could not legally act as a dealer for Harris equipment, Judge Hoff recounted in his judgement.
NBC board minutes also recorded that the board decided on October 8 2001 that the NBC was legally bound to honour the agreement with Harris Corporation.
In a letter on November 16 2001, though, Mulongeni informed Harris Corporation that the contract was cancelled.
On December 12 2001, Mulongeni signed a new agreement with Factcrown on the same terms and conditions as the cancelled agreement – but with a contract price that was half a million US dollars higher than the contract with Harris Corporation.
Because the NBC is a parastatal which receives funding from Parliament it needs to account for its use of public money, Judge Hoff noted.
Taking into account facts like the increased contract price, he stated, it was his view “that the NBC/Factcrown agreement is a clear example of a contract which is against the interest of the Namibian community and therefor against public policy”.
The contract was the product of an arbitrary use of power by Mulongeni, who acted beyond the limits of his powers as Director General, and was a contract that came into being mainly because there had not been any compliance with tender regulations, Judge Hoff found.
Mulongeni, who became the Director General of the NBC in August 1997, still remained in his post until he resigned in September 2002.
Factcrown was represented by Andrew Corbett, on instructions from the law firm Van der Merwe-Greeff. Esi Schimming-Chase and Ramon Maasdorp, instructed by Shikongo Law Chambers, represented the NBC.
AllAfrica – All the Time
See more here:
Namibia: Mulongeni Slammed Over ‘Arbitrary’ Deal