Mathe fears arrest as ‘bankrupt’ New Era files fraud, theft charges

New Era Publications Corporation this week filed charges of fraud and theft against its former CEO Audrin Mathe, following a dispute over the ownership of an expensive company car, but the recovery of the top-of-the-line Range Rover SUV is not New Era’s greatest challenge as it staggers under the massive debt burden the former CEO left behind.

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Further revelations surfaced this week that NEPC could not account for over N$100 million it had spent and that the ailing parastatal owes the Receiver of Revenue more than N$77 million.

With the widely reported fraud and theft charges lodged this week against its former CEO, questions are being asked as to why no disciplinary action was ever taken against the parastatal’s highly paid executives.

It was reported that Mathe had “used inconclusive board documents (resolutions and minutes) to execute the transfer” of the N$1.5 million Range Rover into his name. Mathe’s attorneys insist he was entitled to it by contract.

This should be seen in light of the fact that an investigation by the Anti-Corruption Commission concluded last year that NEPC was in fact technically insolvent — simply put, bankrupt — because its liabilities by far exceeded its income, even when factoring in the annual government subsidy.

The 2018 report of the Auditor General shows that by March 2017 NEPC had accumulated losses of N$42.5 million while its liabilities exceeded N$21 million. The ACC also noted that by December last year NEPC had not yet submitted financial statements for the year ended March 2018.

Six months after his appointment as CEO, Mathe in August 2013 famously boasted that:

Instead, by his own testimony under oath before the select committee on public accounts, NEPC was during his tenure unable to meet its financial targets, its debt obligations or comply with tax law, yet the company was starting new newspapers and paying “performance bonuses” to its executives in as yet undisclosed amounts, while sales of its flagship newspaper dropped.

Circulation figures of the main paper plummeted and the print-run was massively reduced by around two-thirds during Mathe’s tenure.

Financial crisis

Inside sources say by the time of his departure earlier this year NEPC was in severe financial dire straits and needing more government subsidies.

Although he was reported to earn around the same as the President, multiple sources confirmed that Mathe rarely spent more than one or two hours a month at the office, but this apparently didn’t fall in the scope of the ACC investigation.

In a stunning report entitled ‘Fraud not ruled out at NEPC’, New Era in July 2016 already detailed the gaping irregularities in its financial statements, but could not explain it to the select committee on public accounts.

The next year the executives failed again to comply with the Auditor General’s recommendations but had the temerity to ask parliament for more funds to help trace the money they were previously given but couldn’t account for.

In the latest development, NBC News reported on Tuesday that NEPC’s books for 2017 showed an unaudited loss of N$66 million; a further N$33.5 million that the managers failed to account for; as well as N$74 million in outstanding tax liabilities.

Records seen by this reporter suggest that an increase of more than 50 percent to NEPC’s wage bill; more than 250 percent rise in the allowances of directors; as well as the purchase of a luxury Range Rover for the CEO, among other questionable expenses, contributed to the firm’s problems.

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Following a year-long investigation into the company’s affairs, ACC director general Paulus Noa wrote to board chairman Esau Mbako on 5 December 2018 to say NEPC’s “liabilities are significantly higher than the income (even if government subsidy is included) by about 56%.

“Despite this, during 2016 the board approved changes to the structure and salary grading of NEPC staff and the directors’ remuneration, resulting in an increase of 56% in the wages of staff, and an increase of 253% in the remuneration of the director[s].”

Board minutes show that the decision to raise the salaries of top executives was made at a time when NEPC was already up to its neck in debt.

The ACC report shows that in 2015 NEPC had an income of N$33.8 million but its expenses ran to N$66.6 million. In 2017, they raised N$35.5 million but their expenses ballooned to N$76.4 million.

Looming insolvency

Noa warned that the parastatal faces “looming insolvency”. He noted at the end of December 2018 that “It appears as if the 2017 audit report is not yet finalised and [NEPC] has not yet submitted their financial statement for the year ended 31 March 2018,” which was already eight months overdue.

The trend was unsustainable and the situation has predictably worsened.

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Mathe previously and NEPC managing editor Toivo Ndjebela on Wednesday referred all questions to chairman Mbako, who however did not want to entertain any questions about the scale of the company’s losses or whether NEPC would institute disciplinary or criminal proceedings against executives that did not comply with the law, or why they have not yet done so.

The latest reports this hour confirm that criminal charges have indeed been lodged against Mathe. The police said they would first “investigate” the matter and refer it to the prosecutor general’s office for a decision on whether to prosecute. Therefore, my advice to readers is not to hold their breath for this matter to be resolved.

Read an insider report on the case instead:

The killing of Monica Musova and the cover-up at New Era

How Audrin Mathe and the Swapo comrades bankrupted New Era

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