August 26 embroiled in food fight

25 February 2021 | Justice

Windhoek • [email protected]

The defence ministry and two of its August 26 for-profit companies are suing former Windhoek mayor Matheus Shikongo and his company for breach of contract in an attempt to reclaim sole ownership of August 26 Food Service that was created six years ago to supply food to army bases.
August 26 Food Services No 2 was created early in 2015, shortly after the defence ministry and August 26 Holdings signed a contract with Shikongo’s Broad-Based Network company to launch a pilot project that would “establish food hubs” and supply food to army bases.
The February 2015 deal was centred on an initial pilot project that was slated to start four weeks after the signing of the Service Level Agreement (SLA) and commence in Grootfontein, Otavi and Otjiwarongo.
The SLA, submitted to court, stipulated that should the pilot food hubs prove a success, “the newly designed business model” would be rolled out to the rest of the country.
However, the contract was cancelled in December 2015, for reasons not specified in court documents.

Food deal
Shikongo was the chairperson of Broad-Based Network at the time, alongside Lloyd Winterbach, the managing director.
The SLA stipulated that a new company would be created, August 26 Food Service No 2, under the sole ownership of August 26 Logistics. Broad-Based Network was expected to register the new company and transfer all shares to August 26 Logistics.
The “funds generated from the supply of food products to the second plaintiff’s (defence ministry) regional hub companies will be for the third plaintiff’s (August 26 Logistics) account,” particulars of the claim state.
However, the three plaintiffs in the case, August 26 Holdings, the Defence Minister and August 26 Logistics, say they turned to the court in October last year after Shikongo failed to transfer the shares in the intervening six years, despite numerous demands. “Contrary to the parties’ agreement and defence ministry’s instructions, on/or about 9 March 2015, Broad-Based Network caused itself and/or the second defendant (Shikongo) to be the registered shareholder of August 26 Food Services No 2 instead of August 26 Logistics.”
After the cancellation of the contract in December 2015, the plaintiffs allege “during 2016 and 2019”, Broad-Based Network said the shares would be transferred but “to this date failed and/or refused to carry out such transfer.”

The court papers show that the contract between Shikongo’s company and the army was cancelled in December 2015, mere months after the SLA was signed. The reasons for the cancellation are not detailed in court documents.
A letter submitted to court however shows the ministry notified Broad-Based Network in December 2015, that “with effect from 1 February 2016, August 26 Logistics would resume supplying food to the NDF bases in Otjozondjupa region as per the existing SLA between August 26 Logistics and August 26 Holdings.”
A ministry of defence letter, signed by the late Petrus Shivute, then permanent secretary of the defence ministry, informed August 26 Holdings CEO Brigadier General James Auala in December 2015, that the pilot project for the supply of food to NDF bases by August 26 Food Services had been terminated.
“I also wish to inform you that while we appreciated the technical expertise of the Broad-Based Network, it should not more involved in the food supply, but rather concentrate on technical advice and training on food preparation,” the letter notes.
The letter said Broad-Based Network should only continue to “provide a proposal focusing on the training of chefs and cooks including provision of balanced menus, if and when needed.”
The letter underlines that “all outstanding legal issues should be sorted out urgently, including the de-registration of August 26 Food Services No 2.”

Give back
The lawsuit asks that the court issue an order for Shikongo and his company to transfer all shares of August 26 Food Services to August 26 Logistics, or that Broad-Based Network be ordered to pay the “equivalent value of the shares of August 26 Food Services to August 26 Logistics.”
None of the court papers indicates the value of the shares or the value of the deal to any of the parties when it was signed six years ago.
The SLA stipulated that the defence ministry and August 26 Holdings would “render a monthly payment consideration in arrears to Broad-Based Network at a rate of 15% of the total revenue generated from the food hubs, excluding taxation”.
It was further agreed that a “monthly management fee shall be paid to Broad-Based Network” based on the total turnover of all regional hub companies companied. The payment is fixed for the duration of the SLA.”
On Monday, High Court judge Orben Sebeya postponed the case to 23 March for a status hearing.
Sisa Namandje is acting on behalf of the plaintiff’s while Shikongo, Broad-Based Network and August 26 Food Services are represented by lawyer Petrus Strauss.
Shikongo has notified the court that he intends to defend the matter. However, to date, he has not filed a responding affidavit to the allegations.
The army’s food supply contract came under intense scrutiny in 2013, when it was revealed that the defence ministry had contracted August 26 Holdings to supply food, via August 26 Logistics, to soldiers.
The tender was reportedly worth billions of Namibia dollars.
Six catering companies took the matter to court, but their attempt to change the awarding of the multi-billion food tender was thwarted when their case was dismissed.

Similar News


Family’s battle to reunite continues

1 day - 21 April 2021 | Justice

Windhoek • [email protected] Namibian High Commission in Pretoria on Tuesday briefly shut the door to Namibian Phillip Lühl after he tried to submit a formal...

Whistleblower Stefánsson scoops WIN WIN award.

1 day - 21 April 2021 | Justice

This year’s winner of the WIN WIN Gothenburg Sustainability Award is the Icelandic whistleblower Jóhannes Stefánsson, who led the revelation of a widespread corruption scandal...

Family crushed by court ruling on baby girls

3 days ago - 19 April 2021 | Justice

Windhoek • [email protected] what has been described as a judicial cop out, a Namibian High Court judge on Monday refused to set aside the Ministry...

Facebook insult costs N$20 000

2 weeks ago - 07 April 2021 | Justice

Windhoek • [email protected] Mariental doctor has won a defamation suit against a man who in 2018 made public claims on Facebook accusing the doctor of...

SA minsters urged to help Namibian twins Maya and...

3 weeks ago - 28 March 2021 | Justice

Windhoek • [email protected] South African Democratic Alliance (DA) is pushing South African ministers of immigration and international relations to take a stand against Namibia’s refusal...

Immigration bans baby girls from Namibia

1 month - 21 March 2021 | Justice

JANA-MARI SMITHA Namibian father of three has brought an urgent appeal to the WindhoekHigh Court after immigration authorities effectively declared his newborn twindaughters stateless and...

Security company sued for shooting incident

1 month - 05 March 2021 | Justice

Windhoek • [email protected] High Court judge this week gave the greenlight for a lawsuit to continue in which two shooting victims are suing Shilimela Security...

Bad news for same-sex married couple

1 month - 01 March 2021 | Justice

Windhoek • [email protected] Windhoek High Court judge on Friday handed down a defeat to a foreigner married to a Namibian citizen who wanted to be...

Ombudsman tackles CLS favouritism

1 month - 25 February 2021 | Justice

Windhoek • [email protected] John Walters has launched a legal challenge against a Cabinet decision that he argues is unlawful and prejudiced in favour of Namibia’s...

Access to courts enhanced

1 month - 22 February 2021 | Justice

Justice minister Yvonne Dausab tabled the Magistrates’ Courts Amendment Bill in a bid to, among others, increase the monetary jurisdictions of magistrate’s courts last weekDausab...

Latest News

Struggle kids ‘stigmatised’

3 hours ago | Social Issues

Children of the liberation struggle, also known as ‘struggle kids’, feel it is hard for them to secure employment outside government, because there is a...

Central estates agents awarded

3 hours ago | Banking

Aqua Real Estate, Rightmove Properties Windhoek and Arnel Properties were announced as the top three central estate agencies servicing Bank Windhoek.In the category for Residential...

Knight Piésold celebrates a century

4 hours ago | Business

From its humble beginnings in South Africa on 1 April 1921, Knight Piésold has established and grown its local operations within Southern Africa, through its...

Visual arts on a roll!

1 day - 21 April 2021 | Art and Entertainment

The Bank Windhoek Triennial 2020 Awards ceremony and exhibition opening takes place on Thursday (22 April 2021) at 16:00. With 491 submissions received of which...

Family’s battle to reunite continues...

1 day - 21 April 2021 | Justice

Windhoek • [email protected] Namibian High Commission in Pretoria on Tuesday briefly shut the door to Namibian Phillip Lühl after he tried to submit a formal...

Campaigning for counselling

1 day - 21 April 2021 | Crime

Members of Parliament (MPs) have proposed compulsory counselling and psychological support for victims, perpetrators or anyone exposed to gender-based violence to end the cycle of...

Whistleblower Stefánsson scoops WIN WIN...

1 day - 21 April 2021 | Justice

This year’s winner of the WIN WIN Gothenburg Sustainability Award is the Icelandic whistleblower Jóhannes Stefánsson, who led the revelation of a widespread corruption scandal...

Sewing machines, fabric for NCS

1 day - 21 April 2021 | Business

Mulungushi Textiles & Importers recently donated overlock sewing machines and fabrics worth around N$100 000 to the Namibian Correctional Services. The Khomas & Hardap regions...

Is your agent making use...

1 day - 21 April 2021 | Life Style

The way we live and work has been dramatically altered by the pandemic. It follows then that the way people buy and sell houses will...

Load More