Namandje in the spotlight after six ‘sharks’ caught in #fishrot net
In the latest fallout from the bribes-for-quotas scandal that has rocked the local fishing industry to the core, Namibia’s former justice minister Sacky Shanghala and deposed Fishcor chairman James Hatuikilipi are due back in court on Monday.
Ahead of the release of Al Jazeera’s exposé on corruption in the fishing industry, former fisheries minister Bernhard Esau (61), Shanghala (42), James (44), Esau’s son-in-law Tamson Hatuikulipi (38), as well as Ricardo Gustavo (44) and Pius ‘Taxa’ Mwatelulo (31) were arrested last week.
Two of the six suspects — said to be key players in the multi-billion dollar bribery and tax evasion scam exposed by Wikileaks a fortnight ago — Sacky and James were arrested shortly after their return from Cape Town last Tuesday and charged with corruption, money laundering and tax evasion.
Their bail hearing was postponed to 2 December after their South African lawyers were arrested on Friday for working here without work permits.
The high profile arrests of the ministers involved follow the arrest of an Icelandic captain and a Russian at Walvis Bay last week as they docked to land horse-mackerel catches. It was reported that the Icelander is a “former employee of Samherji”, the company at the centre of the bribery scandal.
Confidential company records published by Wikileaks on Tuesday shed more light on the scale of the rot. It shows — on the basis of hundreds of transactions conducted by Samherji through a Norwegian bank — that billions of dollars were laundered through a complex network of firms and tax havens.
The leaked bank records indicate that hundreds of millions of dollars also flowed into companies owned by Shanghala and Hatuikulipi, apparently in return for securing fishing quotas and changes to the law to benefit Samherji.
The Icelandic current affairs programme Kveikur said Samherji had two main aims: to get quotas and get all profits out of the country. Samherji’s catch in Namibia in 2015 was close to N$716.3 million, according to company data for that year — and Samherji’s fishing rights increased in time, Kveikur reported.
They said, with bribes disguised as consulting fees or rent, Samherji over a five-year period paid around N$71.7 million to four companies linked to “the sharks” — either in relation to deals between Samherji and the government or to ensure the support of the fisheries minister and his people.
One of the implicated persons is Tamson Hatuikulipi, a close relative of James and son-in-law of Bernhard Esau.
Firms linked to him, including JHT Trading and Erongo Customs and Clearing Services received vast sums from Samherji. In 2014 alone, Samherji paid N$10 million into Erongo Clearance’s account for unspecified “consultancy services”.
Tamson was said to be an intermediary for Esau.
“The first bribe to the fisheries minister was following a request from the son-in-law wherein he asked whether we were going to make some payments to the minister, as he had done a lot to support Samherji’s efforts to enter the Namibian market. I asked him how much and he mentioned US$60,000” Jóhannes Steffanson, Samherji’s lead representative in Namibia at the time has said.
Jóhannes says he delivered the cash to Tamson in a gym bag at the Hilton hotel in Windhoek.
“For all the bribes we made invoices to justify the payments for the books and the accountants. In some cases, there were consultancy agreements and a fictional rent agreement. It was all for show and mostly done for the bookkeepers to avoid raising questions concerning this.”
“Fishcor holds the biggest quota in Namibia by far. A few years ago the company had no quota, but because the sharks, the fisheries minister, and others, changed the law, they probably hold a third of the horse mackerel quota,” Jóhannes notes.
Esau appointed James as Fishcor board chairman in 2014 and then allocated Fishcor its first horse mackerel quota. He took the quota from Namsov.
“This company is gone. More than a thousand jobs were lost. This company paid all its taxes in the country and it was sacrificed to get Samherji in and to get the sharks access to fishing,” Jóhannes added.
The Supreme Court later ruled that Esau’s allocation to Fishcor was illegal. Sisa Namandje represented the minister. Judge Shafimana Ueitele found the quota allocations illegal but, surprisingly, did not set them aside.
He found that Esau had unlawfully allocated 10,000 tons from the reserve quota to Fischor in July that year, the Small Pelagic Association got 8,000 tons, the Namibian Large Pelagic & Hake Longlining Association 1,000 tons, and the Namibia Fish Consumption Promotion Trust 2,000 tons.
Esau then set about to change the law to increase his powers.
James meanwhile set up a company in Dubai, Tundavala Investments, apparently to launder the proceeds to comrades with an interest in the deal. After Esau’s amendment on the allocation of quotas became law, Johannes wrote to Samherji CEO Þorsteinn Már to say it had gone through:
“James had promised a long-term deal. They needed to start a new [JV] company and share out the percentages.” Thus the amendment resulted in additional annual quota of 80,000 tons “that now went direct to Fishcor from the minister, and from there to Samherji, for a very favourable price.”
Jóhannes later wrote to Már to say: “The ongoing changes in relation to possible new rules and regulations in the fisheries are due to the [fisheries] minister, Sacky, James and Katla.”
Kveikur said Shanghala’s “digital fingerprints” could be seen all over the drafts of this strategy to help Samherji circumvent the need for Namibian asset ownership through a network of opaque company structures to hide the real purpose and destination of the funds.
WEB OF SHELF COMPANIES
A payment of N$2.4 million to a shelf company (ERF 1980) at the same time as Samherji and Fishcor’s first quota trade came through, was proof of this corrupt arrangement, Kveikur said. The payments were initially invoiced as “consulting services”, but were later replaced by invoices for rent and housing renovation of a freezer storage unit in Walvis.
Jóhannes said: “I never saw this storage and when I was working on behalf of Samherji it was obvious that this was just a dummy deal to cover the payments.”
The real purpose of the payments was mentioned in correspondence with Samherji’s CFO in Namibia, who had apparently forgotten what ERF 1980 was, remembering only that it was linked to “James and them.”
“It’s 1.5 million for the [Swapo] party and 500 thousand for the Seaflower (Fishcor) quota”, Jóhannes replied.
The beneficial owners of ERF 1980 are Sacky Shanghala and James, he says. Dubious payments and quota trading with Fishcor subsequently increased, the researchers found.
Icelandic reporters working on the case said Samherji’s approach to doing business in Namibia was to “put a black face” on their operations and “get locals to front as owners”. “They all use fronts, which is commonplace in the corruption down there. This is how Samherji works,” Jóhannes added.
About the allocation of the freezer quota for factory ships, he said: “Yes, it was the clear policy of my superiors to obtain sea freezing quota as inexpensively as possible, by whatever means necessary. Samherji didn’t just accidentally happen to bribe Namibians.”
THE GLOBAL MONEY LAUNDRY
Kveikur found that early in 2016, Samherji received a 5,000 ton quota from Fishcor and paid N$6 million less than a similar deal shortly before. Around that time, JTH Trading — which is owned by Tamson — received payment of N$3.6 million from Samherji for “consulting services”.
“According to a proposed consultancy agreement, the company was meant to assist Samherji to get projects in exchange for undefined performance-related payments. The company repeatedly received payments concurrently with Samherji’s quota deals with Fishcor.
Again, “In March 2017, Samherji paid 25 million ISK to the state-run company and 30 million to JTH Trading. In August of the same year 40 million ISK went to Fishcor and 50 million ISK to JTH. A similar pattern can be seen for the year 2018 and into the current year.”
Over the past three years Samherji has paid JTH Trading close to N$35.8 million. Payments out of JTH accounts can be traced to “companies owned by the other two sharks”, Kveikur said.
Jóhannes explained that, “Instead of paying 100% of the correct price to Fishcor, Fishcor received only 65%, for instance, while 35% was deposited on the sharks’ accounts. We paid less than market price after all our expenses. Fishcor is losing money on this and the State as well.”
A review of Samherji’s accounts at Den Norske Bank shows that around N$47 billion went in and out of those accounts between 2008 and 2019.
Samherji transferred from DNB around N$762 million to a firm with unknown owners, Cape Cod in the Marshall Islands.
Samherji also transferred over N$52.7 million to Hatuikilipi’s shelf company, Tundavala Investment in Dubai.
According to the whistle-blower, Hatuikilipi was “the mastermind” behind setting up the companies and forwarding illegal payments from there to various persons involved, as well as the Swapo Party.
The case is set to return to court on Monday, 2 December.
The Anti-Corruption Commission has said they have a list of suspects, which will likely include Sacky Kadhila, a businessman at the coast who was exposed in the Al Jazeera documentary — Anatomy of a Bribe — as the main go-between for the disgraced former fisheries minister, investors with corrupt intentions and the law firm of Sisa Namandje.
* Part of this report was published in Confidente on 28 Nov 2019. Background reporting and records sourced from Kveikur, Al Jazeera and Wikileaks.