Namibia’s Mines minister, Tom Alweendo, told the leadership of the state-owned company, Namib Desert Diamonds (Namdia), that he is not happy with the manner in which they are selling diamonds to international companies.
Namdia, born out of an agreement between the government and global diamond giant De Beers, has been selling diamonds estimated to be worth around N$2 billion per year since its formation in 2016 under a cloud of secrecy.
Alweendo’s stance comes as Namdia faces allegations of corruption and a continued suspicion of selling diamonds for peanuts to Middle East-based companies.
Another twist to the Namdia episode is the contract awarded to a company called C-Sixty Investments in 2016 by former minister, Obeth Kandjoze, to value Namdia’s diamonds for five years.
People familiar with the matter, but who declined to be named, said Alweendo had asked the attorney general’s office for a legal opinion on whether the payments made by the mines ministry to C-Sixty Investments were legal.
HOW NAMDIA SELLS DIAMONDS CHEAPLY TO DUBAI
The Namibian reported a few weeks after Namdia started operating that it had sold diamonds for US$500 (around N$7 100) per carat. The same diamonds were then sold for US$2 500 (N$35 600) per carat.
Sources in the diamond industry suspect that some Namibians are also benefitting from the cheap sale of Namdia diamonds.
Namdia’s annual report from 2016 to February 2017 tabled in parliament this week shows that the company bought rough diamonds from the Namibia Diamond Trading Company (NDTC) – a joint venture between the Namibian government and De Beers – for N$750 million and sold them for N$860 million, recording a profit of about N$60 million.
Three people briefed about this matter said several officials close to Namdia recently reported incidences of corruption and the continued underselling of Namdia diamonds to Alweendo.
The minister declined to be drawn into publicly commenting on the Namdia saga, but confirmed to The Namibian on Wednesday that he was unhappy with the secrecy around how Namdia sells its diamonds.
“I told them (board) that I’m not happy with the way some things are being done at Namdia,” Alweendo said, adding that he also told the board in April this year about his unhappiness, and was waiting for them to respond.
Alweendo also asked the board to explain why Namdia was not opening up the process of selling diamonds to maximise profits, instead of having only a few buyers.
“Namdia was after all started to discover prices,” he stressed.
According to the portal Investopedia which focuses on financial news, price discovery is the process of determining the price for a specific commodity.
The opening up of the process, Alweendo believes, could also lead to transparency at the institution rocked by corruption allegations.
Namdia has been the subject of investigations since it started two years ago, but there are fears that the state institutions that are probing it do not have the required forensic skills.
The Anti-Corruption Commission investigated Namdia, and concluded last year that there was no wrongdoing.
“I requested him (Kandjoze) to provide clarity (on Namdia). The minister gave me all the answers I wanted. I am satisfied with the answers,” ACC director general Paulus Noa told The Namibian last year.
The dust has, however, refused to settle at Namdia, which led to President Hage Geingob asking public enterprises minister Leon Jooste to investigate the parastatal.
Sources said Jooste completed his investigation, and forwarded the report to Geingob last week. Jooste was unreachable for comment.
Kandjoze handpicked C-Sixty Investments, which is owned by businessmen John Walenga and Tironenn Kauluma (the nephew of former mines minister Helmut Angula) to value 15% of diamonds that came from Namdeb Holdings to Namdia.
At the time of its appointment, C-Sixty Investments’ directors were Walenga as chair, Patricia Kauazunda (deputy chairperson), Uushona Shiimi and Rosa Nangolo.
Officials in the mines ministry briefed on this matter said Alweendo asked Namdia for their opinion about the contract between C-Sixty Investments and the mines ministry.
According to sources, Namdia responded that they don’t need C-Sixty Investments to value the diamonds.
The Namibian understands that Alweendo recently asked attorney general Albert Kawana to advise him on whether the decision of the ministry to pay C-Sixty Investments for doing work for Namdia is legal. Namdia last year decided to stop paying C-Sixty Investment since they never signed for it.
Some believe Namdia could get rid of valuators, a situation which will allow the company to continue undervaluing diamonds. There is suspicion among people familiar with the matter that some people want to remove C-Sixty Investments to create an opportunity for a new company that entertains the demands by some Namdia leaders.
Namdia’s spokesperson Usi //Hoebeb said yesterday that Alweendo is new to his portfolio and would, as expected, have asked for clarity on several issues involving Namdia.
“The issue of “underselling” has been in the public domain since you wrote about it. Therefore, he among other things also wanted to know what this perception is about,” //Hoebeb said.
Namdia denied that they are undervaluing diamonds.
“The average price of the last two sales and all other shipments is higher than the purchase price (the price we bought the diamonds for) and the De Beers sales price,” he stated.
He denied suggestions that Namdia told Alweendo that they did not need C-Sixty Investments in the valuation process.
Namdia’s only annual report so far shows that the company paid C-Sixty Investments around N$3,6 million, while Dubai-based diamond dealer Neil Haddock was paid a mere N$155 000 for marketing the diamonds in that financial year.
The same report shows that Namdia’s board of directors smiled all the way to their banks with nearly N$4 million paid in sitting fees.
The payments were as follows: chairperson Shakespeare Masiza (N$595 000), geologist Venondjo Maharero (N$577 000) while businesswoman Tania Hangula, Lorentha Harases, Florentia Amuenje, the chief legal adviser in the attorney general’s office, Chris Nghaamwa and Bonny Konjore were each paid N$560 000 in that financial year.
Amuenje resigned last year for reasons never stated publicly.