SA National Rakes in Millions From NDC Deal

A SOUTH African businessman continues to rake in millions of dollars for servicing two fruit farms in Namibia that have accumulated huge losses over the past 20 years.

This has prompted rumours that Petrus Abraham Karsten’s company, trading in Namibia as PA Karsten, is being ‘protected’.

Karsten is a shareholding director of South Africa’s leading crop producer-exporter Keiboes Fruit Farms, in which South Africa’s Industrial Development Corporation has a stake.

According to a due diligence report commissioned by the Namibia Development Corporation (NDC) and leaked to amaBhungane, Karsten receives a monthly salary of N$150 000 plus commission for services he renders to the Naute Dam and Eersbegin projects, located respectively near the Namibian towns of Keetmanshoop and Khorixas.

The report, by Cape Town-based Genesis Corporate Services, finds that despite carrying no risk, Karsten also receives an 18% commission in management, marketing and distribution fees calculated on sales revenue.

Dated December 13 last year, the report alleges that Karsten pocketed N$1,3 million in commission payments and monthly remuneration in the 20132014 financial year.

The NDC’s acting managing director Pieter de Wet confirmed that neither Eersbegin initiated in 1993 nor Naute, launched in 2000, have ever broken even, despite a combined government injection of N$112 million.

De Wet would not disclose the historical losses. However, the Genesis report claims that Eersbegin lost N$2,6 million and Naute N$18 million in the 201213 financial year alone.

The report found that the projects would continue haemorrhaging funds over the next six years, with the combined projected losses estimated at N$73 million.

Until 20178, the NDC’s capital investment in the farms was projected at a further N$118 million. The report warned that to carry on “throwing good money after bad” could be seen as an act of negligence.

“NDC management are in a fiduciary relationship and need to act in the best interest of NDC and to achieve its development goals.”

It points out that the contract between Karsten and the NDC can be terminated on a six month notice.

However, De Wet said the Namibian government had rejected the report’s findings. Karsten signed a contract with the NDC in 1993 to render technical and marketing services to Eersbegin, principally a date farm.

His contract to service Eersbegin and Naute, mainly a producer of dates and table grapes, was extended in 2012 until 2018, with an additional one-year automatic rollover.

De Wet said Karsten was “rendering an excellent service” and that the government’s investment was designed to develop new infrastructure, including housing and cooling facilities.

When contacted, Karsten initially denied that he is being paid N$150 000, claiming that he received N$20 000 a month.

He confirmed receiving 18% commission in management, marketing and distribution fees calculated on the sales of the produce that he markets on the NDC’s behalf, but said this is “normal business practice”.

He however later conceded that at one stage the NDC had paid him a N$150 000 fixed salary over a year. However, he said the money had been used to pay four managers hired to manage Naute during that period.

Karsten rubbished as “pure rumour” allegations by NDC officials that he is “protected” because his contract continues to be renewed despite continuing losses.

“I hear these rumours being peddled in Keetmanshoop that De Wet is getting money (from me) to protect me. I deny it,” he said.

Karsten disputes the Genesis claim that his contract with the NDC favours him because he carries no risk

“The contract is not one-sided. Two parties signed it,” he said.

Asked about the report’s finding that the farms had not achieved break-even, Karsten remarked: “I can’t believe it.”

He added that the findings were “somewhat unfair and incriminating” since he was not in full control of the farms.

“I feel discriminated (against). It looks like I am now the vark in die verhaal (pig in the story).

“I was born in Namibia. I thought I could plough (skills in crop production) back into country, especially in the south”.

Contrary to the report’s bleak projection of future losses, Karsten said he remains “positive”.

“There’s a difference between a commercial and government project. The report can say what it says, but I’m positive about the projects,” he remarked, adding that if his company was given more control there would definitely a turn-around.

Karsten said NDC management had even suggested at one stage that his company takes full control, but that nothing came of it because of “political interference”.

“Globally politics is a challenge. I don’t want to incriminate people. Politics sometimes makes it difficult for the management to take a decision.”

De Wet said the NDC had also rejected the Genesis report as “superficial”. He added: “There are too many errors regarding the figures (financial), while opinions were reflected as facts.”

Without going into detail he blamed “politics” for the leaking of the report to the media.

“You (media) are exposing yourselves. At one stage, we will ask how you got hold of the information,” he warned.

De Wet poured water on the report’s projections that the farms will continue making losses even with a sales revenue of N$200 million, claiming Naute would break even this year and Eersbegin in two years.

Denying accusations that Karsten was ‘handpicked’ to provide services, De Wet said the government had gone through a full tender procedure.

The NDC board of directors, he added, had endorsed Karsten’s selection.

De Wet also rejected the report’s finding that Karsten is paid a fixed N$150 000 a month, insisting that he only receives N$20 000.

Source : The Namibian