WALVIS BAY – A forensic investigation into the operations of rail transporter TransNamib may have led to the suspension of two top executives on Friday.
While TransNamib has been reluctant to name the executives, New Era has established that the suspended duo are Webster Gonzo, executive for human capital and Alynsia Platt, executive for properties.
In a statement issued on Saturday, TransNamib CEO Desmond van Jaarsveld said an internal investigation is underway.
“In line with company policy, the process is confidential, and full details cannot be disclosed at this stage. We wish to assure our stakeholders that the investigation is being conducted fairly and in accordance with the highest standards of governance and established procedural requirements,” he said.
Contacted for comment yesterday, works and transport minister Veikko Nekundi, under whose purview TransNamib resorts, confirmed signing off on the suspensions.
He told New Era that it is the duty of the company to inform the public who the executives are as well as the reasons for their suspensions.
“TransNamib is a public institution and should be driven by transparency. I cannot do the work for the company; hence, they should inform the public who the executives are and the reasons they are suspended,” Nekundi said.
According to insiders, the issue centres on property contracts allegedly signed during the period when Gonzo was acting chief executive following the departure of former CEO Johny Smith. The contracts were reportedly concluded jointly with Platt.
Sources claim the agreements did not follow prescribed procurement and governance procedures and may have been concluded in a manner described as irregular and potentially improper.
EY report
Back in 2022, Anti-Corruption Commission boss Paulus Noa directed then finance minister Iipumbu Shiimi to ensure corrective measures are taken against executives accused of impropriety and mismanagement.
“The findings reveal certain irregularities and mismanagement of TransNamib resources by the management of the company,” Noa said at the time.
It was penned after the ACC director general reviewed a forensic report into the affairs of the entity by audit firm Ernst and Young (EY). Among others, EY recommended that the now defunct public enterprises ministry or the TransNamib board consider instituting disciplinary action against employees and executives who failed to meet their performance targets.
The report also lifted the lid on a myriad of irregularities at the rail entity – ranging from ineffective and inadequate utility costs to dodgy contracts and manipulated lease agreements.
What is more, at the centre of the suspension is the handling of transactions relating to TransNamib’s properties.
Although the company auctioned some of its properties across the country in 2022, it is yet to make details and earnings from the auction public.
The latest development adds to a long list of governance concerns that have plagued the national rail operator for years. The report also implicated the former CEO and members of his executive team in a range of alleged irregularities and mismanagement.
Additionally, Platt’s portfolio came under sharp criticism in the EY report. The auditors found that oversight and management of TransNamib’s property portfolio were ineffective and inadequate.
“We could not place any reliance on the property, asset register, property valuations or the contract administration,” EY found. The firm was unable to obtain evidence that regular property inspections were conducted. It also detected inconsistencies in how lease amounts were determined and noted that inflationary and other cost implications were not factored into annual rent increases.
In some instances, lease agreements were allegedly manipulated.
The report further stated that auditors could not find reliable evidence that monthly oversight was performed to ensure that revenue and utility costs were reconciled against a reliable property revenue budget.
TransNamib’s property portfolio is estimated at N$2.5 billion. In recent years, the company auctioned off some properties to raise funds as it continues to record monthly losses estimated between N$10 million and N$20 million.
The EY report recommended that TransNamib conduct a comprehensive investigation into its property portfolio to validate the property register, property valuations, lease agreements and tenants, and to establish possible revenue losses.
It further advised a three-year review of all rail transport agreements to determine the extent of potential irregularities.
It recommended that the then finance minister consider disciplinary action against executives who received generous performance bonuses at a time when TransNamib was struggling to pay creditors. Four executives – Smith, Platt, Gonzo and former engineering executive Ferdinand Ganaseb – received a combined N$700 000 in performance bonuses in 2019. This was despite the absence of a functioning performance management system to assess output across the organisation.
At the time, no other employees were appraised.
EY described the process as “selective performance recognition”, noting that ordinary employees who were not entitled to a 13th cheque were not assessed in terms of the company’s performance management policy.
The auditors further questioned the timing of the bonus payments. While executives were rewarded, the company was facing severe cash flow constraints.