August 26 suffers setback in former MD case

Hertta-Maria Amutenja

High Court Judge Hosea Angula dismissed an application by August 26 Logistics to change the venue of the hearing of a matter against its former Managing Director, Salatiel Ntinda, to the labour court.

The case, which revolves around alleged unlawful decisions made by the board of August 26, saw the company challenging the court’s jurisdiction.

Ntinda brought the matter before the court to declare certain board decisions unlawful. These decisions included Ntinda’s suspension from his position and the initiation of disciplinary proceedings against him, which he argued were made in violation of the Companies Act, 2004, and the Shareholders’ Agreement.

In response to Ntinda’s claims, August 26 argued that Ntinda’s complaint was a labour issue and should be dealt with in the labour court.

However, Judge Angula dismissed this challenge, asserting that the primary dispute was corporate law-related, not labour-related.

“The dispute between the parties is whether the resolutions were valid or not. It follows thus, in my judgment, that the dispute between the parties is not labour-related. The dispute is rather corporate law related which is not justiciable in the labour court,” Judge Angula stated in his ruling.

Judge Angula emphasised that the relief sought by Ntinda was based on alleged non-compliance with corporate laws and not on labour-related conduct.

He highlighted that the disciplinary proceedings against Ntinda were secondary to the primary dispute regarding the lawfulness of the board’s resolutions.

Last year, a disciplinary hearing found Ntinda, and the company’s former finance manager, Karel Nel, guilty of paying N$2.5 million of taxpayers’ funds to a private entity without authorisation. The payment was made to Penda Enterprises.

Following their suspension, a disciplinary hearing chaired by lawyer Clement Daniels concluded in October of the same year. Ntinda pleaded not guilty to all charges but was found guilty of assisting a third party in misappropriating funds from August 26 Logistics.

Despite the lack of evidence implicating Penda Enterprises directly in the misappropriation, Ntinda and Nel were suspended after the company incurred losses in a questionable loan deal.

The agreement with Penda Enterprises, initiated by Ntinda without board authorisation, resulted in the transfer of N$2.5 million. Although Ntinda claimed to have received written instructions marked “secret” from the Chairperson of the board, Petrus Nathinge, he was not authorised to disclose these instructions to third parties, including other board members.

Ntinda argued that his actions were within the scope of his employment and were carried out in good faith, emphasising that he believed board approval was unnecessary.

He further contested the lawfulness of his suspension, stating that he was not allowed to make representations and that the meeting lacked the required quorum as stipulated by the shareholders’ agreement of August 26 Logistics.