Epangelo’s Hawala faces the chop

A power struggle over the control of government mining parastatal Epangelo Mining has ensued between the company’s board of directors and its chief executive officer, Eliphas Hawala.

The Issue has learned that the standoff has reached fever pitch, to the extent that the parastatal’s board allegedly threatened to suspend Hawala early this month. This is despite him being in the final 12 months of his contract, after spending over 15 years at the helm.

At least three people familiar with the situation told The Issue that the relationship between Hawala and his principals has deteriorated in recent months with meetings becoming more accusatory and confrontational.

In one of the meetings, Hawala allegedly labeled the board as suffering from ‘amnesia’. This was allegedly because he felt the board kept disregarding his reports and kept shifting the goal post on instructions they gave him.

Unconfirmed reports indicate that the fallout has spilled over into the factional political battles currently at play within the ruling Swapo party. The developments are believed to have placed mines minister Modestus Amutse between a rock and a hard place.

Amutse on Friday, however, distanced himself from the alleged strife between Hawala and the board as well as on talks that he met the board, early this month, in a bid to resolve the matter.

“It is incorrect. I didn’t meet with the board on this issue and am not briefed on these allegations,” he said.

SUSPENSION

The Issue has learned that early this month, board chairperson Sencia Kaizemi-Rukata, moved to suspend Hawala. She allegedly motivated her stance arguing that Hawala, has been ignoring board directives, that he allegedly failed to provide the board with mandatory reports, including monthly management accounts, which also impact the work of the board’s audit committee. Kaizemi-Rukata also accused Hawala of submitting incomplete and substandard reports to the board and refusing to comply with board resolutions. The board is also accusing the CEO of unprofessional behaviour and allegedly using his political connections to intimidate and bully them. Hawala is a member of the ruling party’s Think Tank.

Hawala’s other alleged crimes include, failing to submit and carry out a company restructuring plan, which includes the appointment of a chief financial officer.

He is also accused of allegedly ignoring procurement procedures when he appointed consultants as well as making financial decisions without board approval. The board has since been seeking Amutse’s support to suspend Hawala. Kaizemi-Rukata, did not respond to questions sent two weeks ago.

The Issue further learned that in return, people close to Hawala took the matter to the attention of higher ups in the ruling party, claiming that the board’s motives were politically motivated. People briefed on the matter said that the alleged victimisation against the embattled chief executive went as far as the board approving a restructuring of the company and increasing all the employee’s salaries but that of Hawala’s. That the board is accused of blocking implementation plans, despite such plans being approved by the ministry of public enterprises when it was still in existence. The sources also told The Issue that Hawala complained about board overreach and that the board was interfering in the company’s daily operations, at times making it difficult for him to fulfill his legal obligations as head of the company, especially statutory requirements imposed by laws governing mining companies and operations.

Hawala two weeks ago, confirmed that he finds himself in a precarious position, with his board writing him a letter with various allegations, which he terms as unfounded. He also expressed confusion because the allegations stem from last year, a period just before the board decided to extend his contract with an additional 12 months, which according to him was an expression of their confidence in his leadership. “I thus cannot add anything further as I am still in the dark on the board’s intention,” he said.

Another government source familiar with the situation told The Issue that Hawala’s problems with the board started as soon as Epangelo Mining started raking in serious income two years ago. As things stand the company is now sitting on cash reserves of about N$250 million. There was allegedly no consensus, between the board and management, on how to manage the money. It is allegedly for that reason that the board is pushing for a chief financial officer of their choice as means to wrestle that control over the funds away from the CEO. Hawala allegedly started pushing back when he discovered that the board has approved that the new financial chief will earn a bigger salary than him.

Hawala has been at the helm of Epangelo Mining for over 15 years. His supporters bemoan the fact that when he took charge of the company, the government gave it initial seed capital of only N$1.5 million. When the company formally started operating in 2012, it then received another N$3 million a year later, which was inadequate for a mining exploration company.