Esau, Shangala pushed out

By Jade McClune

FISHERIES Minister Bernhard Esau and Justice Minister Sacky Shangala were forced to stand down from their ministerial posts yesterday following explosive revelations of high-level bribery and corruption within the fishing sector amounting to hundreds of millions of dollars, which point towards the likelihood that the former ministers will face criminal prosecution.

Impeccable sources close to the Presidency told Confidente yesterday that President Hage Geingob had asked for the immediate resignation of the two ministers, who are heavily implicated in what may prove to be the biggest corruption scandal yet exposed in the history of independent Namibia.

Speculation was rife yesterday, following the release of a database and publication of an international investigation by Wikileaks, Al Jazeera, Namibian reporters and the daily paper Stundin in Iceland that fingered Esau and Shangala as central figures in multifaceted corruption within the fisheries sector.

It emerged this week that the Icelandic fishing firm, Samherji, paid hundreds of millions of Namibian dollars in bribes to politicians and related individuals in Namibia to obtain a fishing quota that laid the foundation for much of the company's billion dollar profits in recent years.

Stundin said a cache of confidential records availed to them in the form of email correspondence, company records, video footage and WhatsApp messages showed how profits and bribes flowed through a network of offshore tax havens into the pockets of politicians and company executives.

The Icelandic paper claimed that Samherji has since 2012 paid hundreds of millions of dollars in bribes to individuals linked to Fisheries Minister Bernhard Esau to secure access to a fishing quota.

“According to documents available about Samherji in Namibia's operations, large payments, amounting to ISK 2 billion (N$238 million), were made to parties making decisions on fisheries issues on behalf of the Namibian state. In addition to paying bribes, Samherji had set up a website for offshore companies where the company engaged in “capital transfers with low transparency and unclear tax payments”.

FISCHOR IN SPOTLIGHT

Stunden said “One of the people who has received payments from Samherji is James Hatuikulipi, chairman of the board of a state-owned company called Fishcor, which among other things distributes quotas to shipping companies in the country.

“Another one that has been paid is his nephew, the son-in-law of Fisheries Minister Esau, Tamson Hatuikulipi. The third is Namibia's current Minister of Justice Sacky Shangala, who is one of the pioneers in organising the business, including owning one company that received payment from Samherji.

“The fourth is Mike Nghipunya, CEO of the state-owned company Fishcor, which [the whistleblower] says has received payments from Samherji through intermediaries.” The case is now being investigated in several countries, including Norway.

Stundin noted that Samherji is by the largest shipping company in Iceland, factoring in domestic and foreign operations. It generated profits of around N$14.4 billion between 2011 and 2019.

“Part of this huge profit can be attributed to Samherji's operations in Africa. Samherji's operation in Namibia makes up about 10 percent of annual income of the Samherji group,” with revenues of close to a billion Icelandic Kroner a year it was estimated.

The deep-going investigation produced evidence that Samherji was in fact paying bribes for quotas in Africa, including through payments to Dubai in the United Arab Emirates from its partner in Cyprus, Esju Seafood, which Stundin said could be called “the centerpiece of the international operation of the Akureyin fishing company”.

“Among other things, Samherji paid over US$4 million, close to half a billion, to a Dubai-based company, Tundavala Investment Limited, owned by James Hatuikulipi, the chairman of the state-owned company Fishcor in Namibia, from 2014 to 2019 to help Samherji's access to Namibia's fishing quota in the country and in Angola. Hatuikulipi is a close relative of the son-in-law of Minister of Fisheries Bernhard Esau, ‘Fitty’ Tamson Hatuikulipi. Fitty's wife, named Ndapandula, is the daughter of Esau.

“The payments were made through Esju Seafood Limited, a holding company and fish company of Samherji in Cyprus, and Noa Pelagic Limited, another Samherji company in Cyprus. Payments from Samherji's companies to these individuals in Namibia amount to more than half a billion kroner”, (circa N$60 million at today’s exchange rate).

‘CONSULTANCY PAYMENTS’

According to the whistleblower, Jóhannes Stefánsson, a former company employee, Samherji paid a bribe for the very first quota the shipping company acquired in Namibia. The payments were called “consultancy payments” at Samherji, but as the former managing director of Samherji in Namibia from 2012 to 2016, Stefánsson says these were in fact bribes.

Stefánsson said he made the decision to reveal what he knows about the company because he feels bad for Namibia – a poor country with the greatest wealth disparity in the world where about one-fifth of the population live below the poverty line.

Stefánsson, who is assisting the Namibian Police, said of Samherji: “They do not hesitate to bribe and break laws to make the most profit out of the country and leave nothing but … money in the pockets of corrupt parties.” He said he paid money to the minister of fisheries and others in Namibia on behalf of Samherji from 2012 until 2016 when he left the company.

“Payments continued to be received by the Namibians after he left Samherji in July 2016, and the last transfers from Samherji to Tundavala Investments in Dubai, the company of James Hatukulipi, were in January 2019, according to evidence seen by Stundin.

“More than half of the nearly ISK 500 million (N$60 million) bribe paid by two of Samherji's Cyprus companies to Tundavala Investments, totaling just over ISK 265 million, was paid out after John left Samherji in Namibia in July 2016.”

“Samherji now fishes in Namibia with two to three factory trawlers, Geysir, Saga and or Heinaste, each of which catches 3,500 tonnes of horse mackerel per month. Alongside these tens of billions of revenue, the total bribe amounts to about and more than a billion dollars.”

TAX HAVENS

Stefánsson also claimed that about US$100 million of Samherji's income in Namibia could not be traced, and suspects that this money was taken out of Samherji, possibly through tax shelters.

“It can therefore be said that a steady stream of money stems from Samherji's operation in Namibia, as well as from Samherji's holding companies in Cyprus, such as Esju Seafood, and is in at least three of the world's tax havens, Marshall Islands, Dubai and Mauritius. In addition, numerous payments are made in large sums to all kinds of offshore companies, including the British Virgin Islands. Little is known about most of these companies.”

No answers were received from Thorstein Má Baldvinsson, CEO and largest shareholder of Samherji, about claims of bribery. When employees of Kveik news asked Baldvinsson about the bribery allegation on October 28, he preferred not to answer questions but spoke instead about the weather. No answers to the bribery were in fact received from two of the largest shareholders and key executives of Samherji.

Confidente was not able to obtain on the record responses from the parties involved by the time of going to press, but a statement from the Presidency was expected to be released by Thursday morning.

ASKED TO PAY

According to the report, Stefánsson said that in 2012, “Fitty Tamson Hatuikulipi asked him to pay Esau, the minister of fisheries... He claims to have called Aðalstein Helgason, the managing director of Kötla Seafood, who was his next manager, and asked him about it. "I called Aðalstein and told him that I was to pay the Minister of Fisheries 500,000 Namibian dollars.

“Then Adalsteinn told me that whenever I had the opportunity to pay the minister of fisheries, I should pay the minister of fisheries. He somehow put it this way. I took it out in cash and let Tamson have it. Tamson was an intermediary in this. I did this twice.”

He said the minister received personal pay, even though the amounts were small compared to the hundreds of millions of dollars that the data show the three closest to him received from Samherji.

“However, these are the examples of direct payments, as he was supposed to receive them through an intermediary. Whether and how much Bernhard Esau, the minister of fisheries, receives from the hundreds of millions of kroner that the trusts have paid from Samherji over the years is still an issue to be shown or mapped, since the case data does not cover cash payments or their fate,” the report said.

‘I DON’T KNOW ANYTHING’

In secretly recorded video footage obtained by the investigating team, the fisheries minister can be seen negotiating in a hushed voice with Samherji executives at what appears to be his farm about the payment of “200,000”. He raises some concern about “money laundering” regulations and about the costs of maintaining the farm, which he said he runs at a loss.

Such compromising footage, observers have said, raise the prospect that the minister was vulnerable to blackmail if it were used against him in fisheries-related negotiations.

Esau when challenged by journalists at a recent summit in Spain about his involvement with Tundavala Investment Limited, the company owned by Hatuikulipi in Dubai, said repeatedly: “I don’t know, I don’t know anything. Go and investigate some other things. I don’t know the company. I never invited them (Samherji). They came to introduce themselves.”

“What about payments to the company in Dubai, which is owned by James Hautikuilipi?” the reporter pressed. “I don’t know, I don’t know anything,” the minister persisted.

“Do you know your son in law said he was going to bring money to you?”

“Go investigate some other things,” Esau retaliated. “I don’t know anything.”

Based on the data released this week, investigative journalist Ingi Freyr Vilhjálmsson concluded Samherji's business “strategy in Namibia can be said to have been so successful, partly because the company had ‘political support all along’, secured by hundreds of millions of bribes called consultancy fees.”   

The Anti-Corruption Commission: Paulus Noa

We are busy with investigations. We are looking at many things. What is reported is one part of broader investigations. The allegation is that this was an [quota] agreement between Namibia and Angola and some people to line their pockets. That is the source of our investigations. It involves a lot of companies (both locally and internationally). It is a daunting task that is taking up a lot of time. It is a cross-border investigation in collaboration with our counterparts. This is not news to us, what is reported, that is.  We have collected documents and we will continue to do more. We have more than what is reported.”

The arrest of the two ministers at this stage will not necessarily guarantee a credible case before court.

The attachment of their properties will be determined by evidence collected in terms of the POCA law (Prevention of Organsied Crime). We cannot do things based on people’s emotions, as this will spoil a good case. A majority of information we gathered was with the help of people from outside the country while local people have a tendency of working in collusion with those suspected of corruption. Had it not been for those sources outside the country, we would not have developed this case to where it is now.  We will continue to collect information to prove whether or not there is a case.


Political commentator Dr Hoze Ririuako

The issue of corruption is being used by those that are campaigning for Swapo as a yardstick, saying that the government is corrupt because the video clips that we saw (on social media) are very incriminating, while we take cognizance of the fact that the due process in any institutional law system like ours, means nobody is guilty until proven guilty in a competent court of law.

But, given the gravity of the incriminating clips the President and the party are caught between a rock and hard place because these people are on the list...that will create another paradoxical type of consideration.

Political Commentator Henning Melber

I think if evidence of large scale corruption is credible enough, a sacking of the two culprits from their current posts is not enough. Then they should be at least for the time being suspended from all offices (including MP status), as long as any investigations and maybe legal proceedings are pending. Their assets should also be seized and frozen until it is established if and how much money they have illegally appropriated, which then should be confiscated and returned to the state.

Given that the President terminated their posts in government with immediate effect, there seems to exist sufficient plausible evidence that they did wrong. Then consequences should be bigger than their mere dismissal from cabinet.

– Background report by Stundin