The Namibian Defence Force lost N$10 million of taxpayers’ money in a failed farm deal after the private seller pulled the plug on the transaction.
The farm in question is Farm Otjisemba No 24, which the ministry tried to buy for N$24 million in April 2017 from businessman Kurt Steinhausen.
A N$10 million downpayment was delivered, and the remaining N$14 million was supposed to be paid over an 18-month period.
The defence ministry’s executive director, Peter Vilho, told The Namibian yesterday: “We are not aware that we lost the farm. As far as we are concerned, we are still in negotiations with the owners of the farm”.
However, multiple sources familiar with this matter confirmed to The Namibian yesterday that the government failed to pay the remaining funds within the agreed time.
Farm Otjisemba is situated right next to the controversial Farm Oropoko, which the same ministry bought in September 2017 for N$45 million.
Although it was said at the time that Farm Oropoko will house one of the Namibian Defence Force (NDF)’s units which does not have a base, sources claim that the farm remains unoccupied.
The Namibian has learned that things erupted around June when the farm owner, Steinhausen, threatened to pull out of the agreement, citing a breach of contract for the lack of payment.
Those in the know said N$10 million of taxpayers’ money ended up in Steinhausen’s hands or at least in his lawyers’ accounts, while the government was left with nothing to show for the transaction.
Defence ministry sources told The Namibian that the ministry pleaded for more time, and undertook to pay the balance at a meeting between Steinhausen, the ministry and his lawyers. The said meeting allegedly took place on 3 July this year.
That meeting was arranged by Steinhausen and the ministry to iron out the issues after he threatened to sue the ministry for breach of contract. He allegedly also changed lawyers after being frustrated by the slow pace at which his initial lawyers, Engling, Stritter and Partners, were negotiating with the government. He then chose Sisa Namandje and Co.
Sources familiar with the situation told The Namibian that after the 3 July meeting, Engling, Stritter and Partners then transferred just over N$9 million of the N$10 million from their trust account to that of Sisa Namandje and Co.
Namandje allegedly then received the money as well as files on behalf of Steinhausen, and allegedly paid over N$9 million to his client.
Namandje declined to comment yesterday, saying he was not part of the farm transaction, and that he was not Steinhausen’s lawyer at the time of the transaction as well as when it was concluded.
“Ask your sources for the contract, its terms and who issued the Ministry of Defence the notice of termination,” he said.
Namandje referred further questions to Engling, Stritter and Partners.
Heiko Stritter, who was Steinhausen’s lawyer during the transaction, said he does not have any instruction on the matter.
There are also concerns on whether the ministry breached state regulations when it entered into a purchase agreement that runs over one financial year.
Steinhausen wanted to sell the Oropoko and Otjisemba farms – which jointly measure about 16 300 hectares – to the military for a combined N$69 million.
With the Otjisemba deal falling flat, Steinhausen is now N$10 million richer, without giving the government a single hectare of Farm Otjisemba.
NDF spokesperson, Peter Shilumbu did not respond to questions sent to him last week.
Ministerial insiders question the need for the farm acquisitions, and why the ministry would, during these crunch economic times, commit the cash-strapped ministry to such spending.
The valuer general in the land reform ministry, Rudolf Nanuseb, said his office was involved with the buying of the farm, and that they gave the green light for the farm prices for both farms.
The Namibian reported last year that the defence ministry spent about N$45 million to acquire Farm Oropoko to use it to train soldiers to live in harmony with wildlife, and to practise ‘perfect shooting skills’, amongst others.
At the time, the secretive ministry said the farm was bought for a bargain, as it was supposed to cost N$69 million. But the ministry ended up buying the farm for N$45 million.
The NDF at the time also said the ministry bought the farm because it was “strategically located not far from the capital [Windhoek]”, and has a helipad and an airfield which the NDF intends to transform into a military airport, adding that the farmhouse also has a well-developed laundry.
It likewise has a conference centre, kitchens, accommodation facilities and a mechanical workshop, where the troops can maintain NDF vehicles without having to travel to town for repairs. The farm is also said to have well-developed water infrastructure, and a local electricity-generation system.
President Hage Geingob said in February last year that he was not briefed about the defence ministry’s decision to buy the farm, noting that “I read in the newspaper that the Ministry of Defence bought a farm for N$45 million, while sending troops home because they could not feed them. I hope this is not true,” Geingob said during the official opening of Cabinet in Windhoek at the time.
Geingob asked defence minister Penda ya Ndakolo to explain the deal. Ya Ndakolo was not reachable, and did not respond to questions sent to him yesterday.