Tuesday 11 May 2021
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Namibian fishing partners gobble up N$404 million in 5 years

… yet cannot account how the money was used!


By Megameno Shikwambi

Namibian business partners who brokered a deal with Icelandic investors to harvest and market horse mackerel in the country gobbled some N$400 million which they have not disclosed how it was used.
The partnership agreement was struck between 3 Namibian companies namely Sinco Fishing, Yukor, and Epango and the Icelandics back in 2013.
The Patriot has recently reported that a management agreement was also 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 further struck a loan agreement which was entered into between a Cyprus based company known as Heinaste Investment and Tidle Wave Investments.
However, the local partners rushed to court when the foreigners opted to sell off their fishing vessel, the “HMV Heinaste”, after it became non-profitable.
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 concluded for the acquisition of the Heinaste (vessel).
The Patriot is reliably informed that the vessel was now lying dormant after the Namibians sold off their fishing quota to a company identified as Erongo Marine Enterprises.
The partnership agreement is such that the Namibians held the quota while the Icelandics brought in the fishing vessel which was bought to the tune of US$28 million.
During the course of this year, this publication has been reliably informed that no quotas were used by the vessel which continues to be unmaintained and depreciating.
With revenues no longer coming in as a result of the sale of the quota, the Icelandics have found a Russian buyer.
If the sale is to proceed, it said to see all business partners going home with N$20 million each as a minimum which is in line with their own share in proportion to the way the shareholding structure is set up.
The vessel is intended to be sold for N$280 million.
However, it is the Namibians who have refused the deal and want the vessel to stay on Namibian waters, to the frustration of the Icelandics who feel they have made hundreds of millions already.
The Icelandics are said to have given an indication, prior to the court case, that they were no longer interested in continuing with the business relationship beyond 31st of December 2018.
The Patriot has it on good authority that the Namibian partners approached court as if they were not aware of this sale.
“We don’t understand why this is coming as a shock to the Namibian partners when they in fact have known of this. The Icelandics are simply not interested because of the break-down of the relationship between the shareholders.  The reality is, the Namibians have offered their fishing quota to another company,” a source said.
The Patriot is also informed that the Namibians attempted to block the shareholders meeting with the urgent court application which got dismissed with costs on the basis of lack of urgency.
The urgent court application brought by the Namibian owners of Sinco Fishing and Epango, was meant to set aside any resolutions that were passed in a bid to get rid of the vessel, as well as to remove one of the directors, Mino Gariseb.
Eventually Gariseb, who represented Epango Fishing, was removed as he had fallen out of favour with the Icelandics.
Gariseb approached the Bank to investigate the foreigners in a case of possible violation of Namibian laws.
According to him, the foreigners may have failed to comply with the Exchange Control Act and other Bank of Namibia directives relating to payments outside Namibia.
Documents seen by this publication have it that the amount of U$ 28 000 000 used to purchase the fishing vessel, the MFV Heinaste, was never introduced as a loan in Namibia.
Based on these actions against the Icelandics, he thus was booted out and his position left unoccupied.
“There were allegations that were made that the Icelandics want to hide who the buyer is and that there is some form of relationship between the Icelandics and the buyer,” said a source.
Gariseb did not stop at that.
He wrote to Bank of Namibia claiming that, 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.
He has further made claims to the effect that that charter fees paid out of Namibia by the Icelanders should not have been repatriated outside.
Gariseb laid further claim 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.
Structure of the partnership
The partnership between the parties was such that a company known as Articnam which was at some point the quota holder.
A company known as Heinaste brought in the vessel, which has now caused a commotion among the parties involved.
The Icelandics owned a company known as Esja. Epango was represented by Mino Gariseb, while Sinco was represented by Sharon Neumbo and finally Yukor’s director was Olavi Hamutumwa.

Double impact
Refusing to admit defeat, the locals filed yet another ex-parte application with case no HC-MD-CIV-MOT-EXP 2019/00289 against Heinaste specifically, (the vessel owner) before High Court Judge Hannellie Prinsloo.
An ex parte decision is one decided by a judge without requiring all of the parties to the dispute to be present.
“The issue with this is that there are four shareholders, but you bring an ex-parte application. The application failed this week after Justice Prinsloo ruled in the Icelandics’ favour.
According to court documents, Sinco sought from the court a rule nisi to be issued an order declaring the Shareholders Agreement concluded between the Applicant and the Icelandic partners as binding between the parties.
“The issue with that was that the shareholders agreement was only signed between one Icelandic partner and Sinco. How do you effect a shareholders agreement where you have two parties, but you have shareholders which go against the Memorandum of Articles,” said the source.
They also wanted the court to declare the resolution for the sale of “HMV Heinaste” vessel null and void. This was passed at an extra-ordinary shareholders meeting on 2 August 2019.
According to Sinco, the resolution was in contravention of the minority protection clause 13.1.16 of the Shareholders Agreement.
Ultimately, Sinco wanted the court to interdict and restrain their partners and any of its directors, from removing the vessel from Namibian Waters and Namibian jurisdiction.
With the second application dismissed, the Icelandics have lee-way to proceed with the sale of the vessel.
It also means the removal of Gariseb as director stands.
“They had brought this whole agenda that they had been oppressed as minority shareholders but how do you even make such an allegation as a minority shareholder when you have been paid over N$400 million over the period from 2016? No one can account for that money!” said the source.
Since 2013, proceeds paid before tax to the three Namibian partners, Sinco, Epango and Yukor was reported in the chart below.

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