Friday 23 April 2021
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N$400m, a fishing vessel expose a can of worms

By Megameno Shikwambi

The fight over  a fishing vessel between two local fishing companies and Icelandic partners have taken a n ugly twist as the Bank of Namibia has now been roped in to investigate the foreigners.
Two local fishing firms, Sinco Fishing and Epango have so far approached the High Court seeking an order to interdict the Icelanders from selling a fishing vessel which according to documents seen by The Patriot was purchased via a loan of US$28 000 000.
The locals were in a joint partnership agreement with Tidle Wave Investments, Yukor Fishing Joint Venture Company, Esja Fishing and Gazania Investments.
A management agreement was later signed between Tidle Wave Investments and Esja whereas the latter would manage the business of the joint venture on a commercially viable and sustainable basis.
The partners struck a loan agreement which was entered into between a Cyprus based company known as Heinaste Investment and Tidle Wave Investments.
The partnership’s core business was harvesting, marketing and selling horse mackerel products.

Litany of agreements
A shareholder agreement concluded between Yukor, Sinco, Epango and Tidle Wave Investments Eighty Seven in respect of Tidle Wave Investments Ninety Two (Articnam Investments) being the investment company was made for the acquisition of the Heinaste (vessel).
The vessel was not purchased until a loan agreement was reached by Articnam Investments and Heinaste Investments as well as a Memorandum of Agreement.
Further, a bareboat charter agreement was concluded between Heinaste Investments (as owner) and Articnam Investments as charter and then a sub-charter agreement for the charter of the Heinaste to Articnam.
A charter agreement was reached which provided for the charter of Heinaste from Heinaste Investments by Articnam Investments and the further sub-charter of the Heinaste to Articnam from the first of January 2013 until December 31st 2018.

How things got ugly
However, the Bank of Namibia has now been approached to investigate the foreigners in a case of possible violation of Namibian laws.
According to the local partners, the foreigners may have failed to comply with the Exchange Control Act and other Bank of Namibia directives relating to payments outside Namibia.
Documents seen by this publication have it that the amount of U$ 28 000 000 used to purchase the fishing vessel, the MFV Heinaste, was never introduced as a loan in Namibia.
Against legal opinion sought in this case, no exchange control approval was obtained for the loan (capital and interest) repayments to be repatriated outside Namibia.
“If such approval was obtained, it was conditional to the fulfilment of the loan agreement conditions,” the documents read.
Another suspicion is that charter fees paid out of Namibia by the Icelanders should not have been repatriated outside.
Documents show that the charter fee payable to Articnam to Articnam Investments was US$6.1 million per quarter meaning an amount of US$1.5 million multiplied by four, which is the charter fee amount.
The various charter agreements indicate and have been applied as, one is for US$5.6 million per year and covers the payment of a loan and interest. One is for US$6.1 million per year and cover payment of loans and interest, and US$560 capex.
This is between Tidle Investments Ninety Two (Articnam Investments and Esja).
“We have not been provided confirmation whether the charter fee was actually paid to Articnam Investments and if the charter fee was paid to Heinaste Investment whether such payment was for the repayment of the loan,” a source has said.
Further, documents show that in terms of clause 3.1 of the loan agreement: “The loan shall come into being by the borrower to the lender upon the fulfilment (of) specific conditions including but not limited to the registration of the Heinaste in the Namibian Ships Register with the ministry of works”.
“To our knowledge, this condition has not been fulfilled therefore the question arises whether the loan agreement ever (came) into being,” the source has also submitted.
While a sales agreement was concluded to purchase the vessel, it took the form of the Norwegian Shipbrokers’ Association’s Memorandum of Agreement for the sale and purchase of ships.
“We have not been provided confirmation whether the sale agreement was implemented,” the source added.
The source also said observations have been made of Bank of Namibia’s response through the First National Bank of Namibia in respect of the Exchange Control Application by Tidle Wave Investments Ninety Two for approval of a foreign loan to obtain fishing vessel.
Another observation was that another foreign loan reference number 2017005188 was approved through Standard Bank Namibia and there were requests to authorize payments of capital.
This has been contested by the Namibian partners.
“Esja has been changing company in which the loan was supposed to be introduced and the vessel to be registered, so did they change lawyers and auditors for this very same purpose, from Tidle Wave Ninety Two, renamed Articnam Investment.
Then a new company christened Shelfco Investment 169 was introduced as the vehicle to acquire the said vessel and later rechristened as Heinaste Investment (Namibia) to achieve the objectives of illegally repatriating money out of the country,” the source said.
The new company is said to having never been mentioned in the initial agreements and therefore “has no business to repay the loan and repatriate monies out of the country”.
The Patriot is informed that VAT exemption and Import Permit were favorably considered by the ministries involved.
A thorough investigation has been called for “as the intent of the transaction eventually changed in shape and form”.

Icelandic vessel co-owners hit back at Namibian fish-quota partners
Icelandic co-owners of a fishing vessel that has been mired in controversy have hit back at their Namibian partners who have approached the court disputing a decision to sell it off.
The Icelanders’ relation with Namibian fishing companies, Sinco Fishing and Epango Fishing started off in 2013.
The partnership has generated over $400 million for the quota holders alone.
But the foreigners, through their lawyers have this week come out to say that the cooperation came to an end on 31 December 2018 and as a result, there was no purpose to own a vessel without quota.
“They have received all their money and even more. In addition, they own 41.6% in a vessel worth about $300 million,” they said.
They have claimed that keeping the vessel would only accumulate costs and result in the vessel being auctioned off.
“That would be detrimental for all involved,” they said via email.
Speaking to The Patriot this week, the Icelanders’ lawyers said, “In the ongoing court case Sinco maintains that our client has passed resolutions without enough votes.
“Our client believes that decisions were in accordance with applicable rules. We do not understand why Sinco wants to prevent the sale of the vessel. The prospect buyer is one of the largest seafood companies in the world, unrelated to our client, and the price is above valuation of the vessel.

Therefore, it is unclear what Sinco’s motive is.
This circus that Sinco has put on display in the newspapers lately is detrimental to themselves and the entire fishing industry. They are exposing themselves claiming that they have been mistreated while they themselves have been overpaid.
They may also be exposing their fellow quota-holders who seem to have even bigger issues with tax authorities.
As mentioned, they have already received in excess of $400 million. What have they done with that money? Has it only been invested with car dealers or how has that money been used to benefit the Namibian fishing industry or other sectors?” they said.
According to the lawyers, by making false accusations against their foreign partners, they are making it more unattractive to foreign investors in general to come and invest in Namibia.
“That will not further our fishing industry where we desperately need more knowledge and investment. Why would anyone want to come with their money if this is what they are risking?” they concluded.

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