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Company defends N$1,3b tender for 5-year-old

The legal representative of Cospharm Investment says there is nothing untoward about a company with a five-year-old shareholder scooping a N$1,3-billion medical tender.

The toddler is a 51% shareholder of the company, which has been awarded a government tender to supply pharmaceuticals used in cancer treatment and psychotic disorders.

The contract will span two years.

The other shareholder is the child’s father, Cosmas Mukaratirwa, who owns 49%.

There is, however, no record of Cospharm Investment (Pty) Limited on the database of the Business and Intellectual Property Authority (Bipa).

Cospharm Pharmaceutical CC was, however, registered in 2014 by Mukaratirwa.

He is also the sole member of the CC.

Mukaratirwa’s lawyer, Matilda Jankie-Shakwa, last week asked whether there was any limitation on the age of a shareholder in terms of the Companies Act.

“The shareholder is just an investor who invests in a company which does business. It’s not the person who runs the business or even makes the decision.

“Any company will have a board of directors which makes decisions,” she said.

Jankie-Shakwa did not confirm whether the minor is indeed a shareholder.

The tender, worth N$1,4 billion, was advertised on 29 April 2022 and was awarded by the Central Procurement Board of Namibia (CPBN) on 16 August for the procurement of the supply and delivery of pharmaceutical products for the Ministry of Health and Social Services.

The child’s father, who is a pharmacist and the managing director of the Cospharm Group, was accused of selling unregistered medicine to the government’s Central Medical Stores two years ago.

The state, according to Jankie-Shakwa, withdrew the case.

Mukaratirwa granted himself power of attorney to initial and sign the tender bidding documents for procurement purposes.
He said the authorisation had been conferred to him by the company’s board of directors.

Messe Tjituri, a proprietor and attorney, says close corporations do not have shareholders.

“A CC is represented and managed by its members, unlike with a proprietary limited (Pty), where you have directors who make business decisions,” he says.

Tjituri says a minor cannot be a business owner, because minors are not eligible to pay tax.

Another lawyer, Bernhard Tjatjara, says the company unlawfully used the minor in its tender application document, while the minor is not part of the CC’s founding statement.

“There could be misrepresentation there. The board needs to relook the awarding of this tender,” he says.

On 23 April, Cospharm was part of a group of 22 bidders who were initially not selected to be awarded a tender.

According to the CPBN summary, the company was disqualified for failing to initial next to a mistake the bidder made, and for not responding to the CPBN’s enquiries.

Mukaratirwa applied for reconsideration on 2 May.

In his affidavit, he claimed the bid should not have been disqualified on the grounds specified.

Mukaratirwa’s reasons were based on the fact that he submitted two bid prices – one typed and another handwritten.
The typed document did not have any overwriting.

However, the overwriting was on the handwritten document, which caused the company to be disqualified.

Mukaratirwa said the two bidding documents should be considered as a collective.

“The applicant (Mukaratirwa) accordingly seeks a reconsideration of the first respondent’s (CPBN) decision on the ground that the first respondent acted irrationally, irregularly, and contrary to Article 18 of the Namibian Constitution,” he said.

The instruction to bidders in the bid document states that “any interlineation, erasure, or overwriting to correct errors made by the bidder should be initialed by the person or persons signing the bid”.

On 3 August, the CPBN informed all bidders that Mukaratirwa’s company was responsive and would be awarded a tender for various items.

CPBN spokesperson Johanna Kambala has confirmed that the company was initially not selected for the tender as the bidder was disqualified from the evaluation process for failing to initial a correction.

She said the bidder applied for reconsideration and the board found that the reconsideration application had merits, as the bidding document makes provision for bidders to either type or write their bids and any other document included in the bid.

“As a result of these findings, the board directed the bid evaluation committee to re-evaluate Cospharm’s bid by taking into consideration the typed bid form, which was included in their bid.

“ It transpired that Cospharm bid the cheapest in certain line items, and thus a reallocation of awarded products had to take place, affecting the bidders who were initially allocated those products, but who had offered more expensive prices than those of Cospharm,” said Kambala.

She could not comment further, saying the matter is currently with the High Court as well as the review panel.

ErongoMed Health Distribution and Africure Pharmaceutical Namibia (PTY) Ltd allegedly approached the review panel on the matter.

Africure, which is owned by businessman Shapwa Kanyama, took the matter to the High Court.