BEE share saga

October 3, 2014, 10:54am

BEE share saga

ALARMS over the alienation of a 15% minority shareholding worth N$170 million in Mobile Telecommunications Ltd (MTC) have gone off, while the Minister of Finance and Cabinet already insisted on clarity on the process presided over by the Minister of Information and Communication Technology, Joel Kaapanda.

Despite the warnings and advice by Cabinet seeking transparency in alienating MTC shares, insiders claim that BEE partners already shortlisted as beneficiaries are embroiled in infighting, delaying the process even further. This comes in the wake of additional pressure from Cabinet insisting on a transparent process similar to the Bank Windhoek offering of shares to the public. Finance Minister, Saara Amadhila-Kuugongelwa, raised her concern on the capacity of the government-sponsored social welfare institutions to buy shares, warning that their shares might be sold to the already advantaged individuals and organisations. 

She warns, “they will only be able to do so when they sell the shares to utilise the proceeds to fund their programmes.”

Efforts in the past month to get any clarification on the concerns from Kaapanda failed.

The Ministry of Information tabled the alienation of 15% shareholding in MTC in May this year to the executive, which is viewed just as a formality since the process already started four years ago, and it is for all practical purposes completed.

The original plan approved in 2005 was to set up the 10% trust to benefit students, disabled persons, early childhood development, orphans and vulnerable children as well as senior citizens. 

A memo indicates that the executive still need to endorse the alienation in two phases with the Namibian Post and Telecoms Holdings Ltd (NPTH) which should buy the shares and hold it in a special vehicle, and thereafter offer 5% of shares for business empowerment through bidding, but in reality the shares have already been taken up. Sources indicates that the executive was asked to approve the creation of a committee to handle the 5% share alienation to the public and the creation of a trust fund to hold the 10% MTC shareholding for state-sponsored institutions and programmes.

A group of high-ranking government officials, liberation veterans and tenderpreneurs have apparently secretly awarded themselves shares worth N$170 million in MTC, meant for public and social welfare organisations. Since MTC was established in 1995, 15% of the shareholding has been reserved for BEE. The state through the NPTH holds majority shareholding of 51%, while Portugal Telecom has 34%. 

The government has secured consent for the move in principle from Portugal Telecom, which owns 34% shares in the company but is not known whether they will agree on the actual process of share alienation. Based on MTC’s share market value in September 2012, total equity was about N$1,132 million and 15% would amount to about N$175 million of which N$113 million would go to the trust and about N$57 million worth of shares to the empowerment business beneficiaries.

Courtesy Informante