- Breakdown of trust
- Board, management at loggerheads
- Govt intervention requested ASAP
From six chief executive officers, three boards and numerous turnaround strategies in less than six years, trouble continues to besiege the state-owned rail parastatal.
It is like we heard it all before as TransNamib Holdings continues to paint a picture of a company limping from one crisis to another with two executives being suspended to enable the company to conduct an unhinded investigation into allegations levelled against them. Claims of systemic failure to comply with corporate governance rules, witch-hunt and staffers hired and fired at will has left the company in a bad state.
Customary to the rail agency over the years, the troubles stem from the broken relationship between the board and management again and government has admitted that the situation at the company is not healthy.
Public enterprise minister Leon Jooste described TransNamib as a “strategic and significant enterprise” as he revealed a litany of possible steps that government plans to take to turnaround the fortunes of the parastatal.
The Paul Smit-led board has been characterised by dogged bravado as it marches forward with transforming the rail agency, and this week it lived up to its own aspirations when it suspended Executive of strategy and stakeholder management, Hippy Tjivikua and property executive Struggle Ihuhua.
However, fresh details have emerged that the board and the management of the company had no peace between them. The relationship was so strained that Tjivikua wrote to Works and Transport minister Alpheus !Naruseb in April “to inform you about concerns on governance, state of affairs and the conduct of our Chairman Mr. Paul Smit”.
This was Tjivikua’s second complaint letter in a year to !Naruseb in which he complained of Smit’s apparent unbecoming conduct and management style.
The Patriot understands the April letter sparked anger within the board which subsequently moved to suspend the duo.
“You may recall that less than a year ago, on 3 May 2016, I wrote a memorandum on behalf of EXCO complaining about the unbecoming conduct and way of leadership of Mr. Paul Smit. I recall that your office intervened and tried to resolve the matter with various discussions that took place as well as the visit of Hon. James Sankwasa, Deputy Minister of Works and Transport to TransNamib,” wrote Tjivikua. He continued: “I should put it on record that the situation has not changed and I am obliged to again bring it under your attention for your urgent intervention and action. I will narrate some of the issues that have prompted me to write to you today. My colleagues and other Board members can also attest to their compounded experiences, which borders on disregard for corporate governance, strained relationships and does not make the environment at TransNamib conducive for business.”
Tjivikua, who was axed as acting CEO in April, also claims there is disunity amongst board members which is permeating through to management.
According to the letter, attempts to have a team building exercise in April failed because some board and management members felt the exercise is futile “as other pressing issues raised frequently remain unresolved due to lack of teamwork and mutual respect.”
TransNamib sources say the relationship between Tjivikua and Smit has been frosty since their paths met at the rail agency.
Tjivikua even accused Smit of flouting company rules to take his wife along on an official trip to the United State of America last year.
“When Mr. Smit was arranging for his trip to the USA last year, the company received a quotation for business class travel. Mr. Smit wanted the company to convert the business class ticket to economy class and the difference to offset the ticket for his spouse at the expense of the company. He was advised this this is irregular and unprocedural against corporate governance. There were serious differences on this matter and Mr. Smit was very unhappy that his instructions that are against the company policies could not be entertained,” said Tjivikua.
Tjivikua also accused Smit of bypassing him when he[Smit] issued letters to Webster Gonzo(Executive: Human Capital) and Ihuhua whose contracts will end in November and October respectively.
“The letters were issued without my consultation and involvement indicating that their employment contracts will not be renewed and will be advertised and they are eligible to re-apply. This function merely lies with the CEO as the principal accounting officer and not of the Chairman. I was already in consultation with external legal counsel on this matter and such notices are due six months in advance,” he lamented. Smit did not respond to queries sent to his mobile phone.
Dark presence, bright future
Minister of Public Enterprises Leon Jooste is optimistic about the future of TransNamib, but he warned that for the agency to be successfully several operational changes have to be made.
“It[Transnamib] is not in a good shape. The company is relevant and we have to work on perfecting it. The conversation around TransNamib is an uncomfortable one for many, but we have to take certain decisions to unlock its full potential. If we can unlock the full potential of TransNamib and move goods from the road to the rail, we will subsequently unlock the full potential of our harbor,” he said. According to Jooste, about two-thirds of TransNamib employees have no job descriptions while 80% of the company’s finances cater for salaries.
“We have to clean it up by fixing the leadership and strengthening the board. Last year the company brought a laughable business plan which we rejected. It is currently being fine-tuned and it will be finalized soon,” he said.
He added: “The company has a good balance sheet and a massive property portfolio which will make the sourcing of funds easier.” “To protect our investment as the shareholder we need to take tough political decisions for the long-term existence of the company,” he said.
Tjivikua, Ihuhua suspensions TransNamib Board of Directors has said it suspended two executives because the marketing department is under-performing and there is a need to realign the business towards improving performance and customer satisfaction.
A media statement on Tuesday said the department’s poor performance came after the manager in the business development and marketing department resigned.
An internal memo informing staff of the executives’ suspension on Monday explained that the action was enforced for the company to conduct an investigation into allegations levelled against Tjivikua and Ihuhua.
“As a result and in consultation with the Executive team, the Board resolved that Acting Chief Executive Officer (CEO) Michael Feldmann – who has marketing expertise – take up the Acting position as Executive Commercial and Marketing,” reads the statement, adding Feldmann on Monday offered to resign as acting CEO to take up that position.
The Board further decided to rotate the Acting CEO position amongst the Executives on a monthly basis pending the appointment of the substantive CEO, something that according to the statement is 80 per cent completed.
The statement went on to say the positions of the suspended executives shall remain vacant until the investigation process, envisaged to not take more than two weeks, is complete.
The national railway utility has over the past years been making headlines over suspending a CEO accused of various irregularities, sacking other staff and being under consideration for liquidation as a public enterprise to streamline operations.
The Board in the statement elaborated on the “streamlining of operations”.
“The board aims to right size the company via voluntary early exits and voluntary early retirement as the first two options. Whilst retrenchment of employees cannot be ruled out, such retrenchment shall be undertaken as a last resort and in compliance with the law.”