Namibia – The status of Air Namibia can be described as shaky following resignation of its board, which accuses government of corporate governance violations in its dealing with the airline.
Reports reaching Taarifa business desk indicate that the airline board resigned en masse on Wednesday.
The Ministry of Public Enterprises has requested a legal opinion regarding Air Namibia’s last minute settlement agreement reached with a Belgian company, Challenge Air, which is alleged to have been concluded without its approval.
In the letter, the airline board hit back at government’s accusations that it was not consulted over its decision to enter into settlement agreement on Monday.
“The Board has, over a significant part of its tenure, had to endure the usurping of its functions by the state as shareholder, which is not consistent with sound SOE governance. The situation with Air Namibia has degenerated…. These are unfortunate instances that fly in the face of good corporate governance and have made it extremely difficult for the Board to execute its fiduciary role.”
The Air Namibia board (in picture below) said the agreement which will see it pay N$182 million to settle the debt owed to the Belgian company will not require any government funding or guarantees.
According to court documents, Air Namibia agreed to begin the process of paying the money owed due to the lawsuit, amounting to €9,867,053 (N$182 million) “On or before 18th day of February 2021. Air Namibia shall cause a first payment to be made.”
Four million Euros will then be paid by Air Namibia beginning with monthly instalments of N$677,175.50 on 16 April, with the final instalment to come on 22 January 2022.
“In the event that Air Namibia defaults on any of its obligations contained hereinabove, and or any payment scheduled per clause 2.2 hereinabove, Challenge Air shall be entitled to execute immediately by a writ of execution,” according to the settlement.
This settlement, however, comes as Air Namibia had previously reached a settlement with the same company and agreed to pay the debt. The airline subsequently failed to honour that agreement.