Nearly 1 300 employees of Rani retailers and other affiliated franchises across the country might not receive their June salaries after the Bank of Namibia froze the companies’ accounts.
In an urgent application filed in the High Court, the companies; Nemi Investments 104 CC, Nemi Investments 105 CC, Rani Traders, Rundu Cash and Carry, Dharani Traders, and Oshana Cash and Carry claim BoN on 29 March froze their accounts which hold in access of N$13.8 million.
The companies together own over 40 wholesale and retail stores across the country.
In court documents, Ali Dharani, a majority shareholder in the six companies said should the situation remain as is, the businesses will not be able to meet their financial obligations come 30 June.
This, he said, includes payments of N$3 million to its 1 300 employees, N$3.5 million tax to the Namibia Revenue Agency (NamRA), and suppliers for new stock.
According to Dharani, the employees will suffer immensely if they do not receive their salaries as they won’t be able to pay their accounts including rentals, food, school fees, and other necessities.
There is also fear the non-payment of salaries might result in a labour unrest, which will severely affect the operations of the stores.
“In some places, the applicants are the only suppliers of daily commodities in the villages. If they are out of business and have to close their doors due to non-payment of employees, creditors, and suppliers, it will prejudice the entire community,” said Dharani.
Dharani said he and his fellow partners had to loan the companies N$14 million to keep them afloat. The loans have to be repaid by the end of July.
He said BoN did not give the companies an opportunity to be heard before they decided to freeze their accounts.
According to a letter from BoN dated 29 March directed to the companies, the bank decided to freeze the accounts on suspicion that “monies held in the accounts of the referenced entities were so held and or received in violation of the exchange control laws”. The bank also indicated they are busy carrying out investigations.
However, Dharani said they did not receive an explanation of how they contravened the said law.
He said due to the conduct of their businesses in Oshikango and Rundu, they applied to BoN through their bank, Standard Bank for permission to be allowed to accept foreign currency instruments in payment of goods sold or services rendered. The permission was granted on 19 December 2008.
Dharani claims Nemi Investment 104 CC, Rani Traders, and Rundu Cash and Carry were the only companies that received foreign currencies in the past five years totalling N$1.1 million.
“These amounts were received lawfully and not in contravention of the regulations. But disproportionately, the first and third respondent had blocked an amount of N$13.8 million owned jointly and between the six applicants. This is unfair, unreasonable, and downright unlawful,” said Dharani.
The companies want the court to set aside the BoN’s decision to freeze their accounts and direct it to allow the companies to have access to them.
The BoN has since filed its notice of intent to oppose the urgent application.
The companies are represented by Sisa Namandje while Charles Visser is appearing for BoN.
– mamakali@nepc.com.na