Ex-NBC Chief in Supreme Court’s Firing Line

A COMPANY that has been suing the Namibian Broadcasting Corporation in an attempt to force it to implement a multimillion-dollar business deal dating from 2001 has lost a Supreme Court appeal on the matter.

In a judgement delivered last week, the appeal that the company Factcrown Limited had lodged against a High Court judgement in which its claim against the NBC was dismissed with costs was likewise dismissed, with Factcrown again ordered to pay the public broadcaster’s legal costs.

The findings that Judge Elton Hoff made in the High Court’s judgement, which was delivered in December 2011, were correct, Acting Judge of Appeal Johan Strydom said in the Supreme Court’s judgement.

Judge Strydom found – as had Judge Hoff before him – that the former director general of the NBC, Ben Mulongeni, had no authority to conclude an agreement with Factcrown in December 2001, and that Factcrown’s managing director, Nigerian businessman Setima Benebo, should have realised that Mulongeni did not have the authority to enter into the contract.

When Mulongeni first cancelled an agreement with a British company, Harris Corporation, which had previously been represented by Benebo, and then signed the agreement with Factcrown, he was acting in the interests of Factcrown and Benebo and against the interests of the NBC, Judge Strydom commented.

The judge also said that Mulongeni’s attitude – he claimed that the cancelled agreement with Harris Corporation and the more expensive contract subsequently concluded with Factcrown were the same – “showed a lack of understanding of corporate governance and liability”.

In its case against the NBC Factcrown was asking the High Court to order the public broadcaster to implement the contract which Mulongeni signed with Factcrown in December 2001.

In terms of that contract, the NBC was due to buy broadcasting equipment from Factcrown at a total cost of US$12 million (then about N$133,5 million).

The agreement with Factcrown was supposed to replace a ten-year contract which Mulongeni had signed with a British subsidiary of Harris Corporation, which is an American manufacturer of broadcasting equipment, in January 2001.

In terms of the agreement between the NBC and Harris Corporation the company was due to supply broadcasting equipment to the NBC at a total cost of US$11,5 million (about N$90,6 million at the exchange rate then).

The contract with Harris Corporation was signed after that company’s tender for the supply of the equipment had been accepted by the NBC’s tender committee and its board of directors. Benebo still represented the company in Namibia at that stage.

However, during 2001 Harris Corporation and Benebo parted ways. Benebo complained to Mulongeni after Harris Corporation had cancelled his appointment as its agent, and Mulongeni then wrote a letter to the company on an NBC letterhead in which he accused Harris Corporation of sending out conflicting signals with regard to Benebo’s status as the company’s representative.

Mulongeni also asked Harris Corporation to quickly resolve the difficulties in its relationship with Benebo, Judge Strydom recounted.

The judge commented that Mulongeni’s letter was an attempt to get Harris Corporation to reinstate Benebo as their agent. “In doing so Dr Mulongeni was acting in the interests of Factcrown and Mr Benebo and not the NBC,” Judge Strydom said.

After Harris Corporation did not reappoint Benebo as their agent, Mulongeni cancelled the agreement with the company on bogus grounds, and without going through a tender process concluded a more expensive agreement with Factcrown that was “demonstrably harmful” to the NBC, Judge Strydom said.

Mulongeni, who became the director general of the NBC in August 1997, resigned from that post in September 2002.

Factcrown was represented by senior counsel Andrew Corbett, on instructions from the law firm Van der Merwe-Greeff Andima Inc, in both the High Court and Supreme Court. Esi Schimming-Chase and Ramon Maasdorp, instructed by Shikongo Law Chambers, represented the NBC.

Source : The Namibian