Shanghala, Hatuikulipi arrested

By Jade McClune

FORMER justice minister Sacky Shanghala and former Fishcor chairman James Hatuikilipi were taken into custody on Wednesday in the latest fallout from the bribes-for-quotas scandal that has rocked Namibia’s fishing industry to the core.

The two suspects, said to be central figures in a multi-billion dollar bribery and tax evasion scam exposed by Wikileaks a fortnight ago were arrested shortly after their return from Cape Town and are set to face charges of corruption, money laundering and tax evasion.

Their arrest follows that of an Icelandic captain and a Russian captain 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.

Further revelations published by Wikileaks on Tuesday shed more light on the scale of the rot. It shows – on the basis of hundreds of transactions by subsidiaries of Samherji through a Norwegian bank – that billions of dollars were laundered through a complex network of firms and offshore tax havens.

The leaked bank records indicate that hundreds of millions of dollars flowed into companies owned by Shanghala and Hatuikulipi, apparently in return for securing fishing quotas and changes to the law to benefit Samherji.

Samherji had two main aims: to get quotas and get all profits out of the country. It was reported that the value of Samherji's catch in Namibia in 2015 alone was close to N$716.3 million, according to company data for that year and Samherji's fishing rights increased over time.

The Icelandic news programme Kveikur 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 Hatuikilipi, 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 2015 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 money 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.”

FALL OF FISHCOR

“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, following which the minister set out to amend the law. James meanwhile set up a company in Dubai, Tundavala Investments, apparently to launder the proceeds to comrades with an interest in the deal.

After the amendment became law, Johannes wrote to CEO Þorsteinn Már to say it had gone through and added: “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.”

Kveikur said 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. 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 party and 500 thousand for the Seaflower (Fishcor) quota”, Jóhannes replied.

The beneficial owners of ERF 1980 are said to be Sacky Shanghala and James. Dubious payments and quota trading with Fishcor subsequently increased, the researchers found.

Jóhannes 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 “digital fingerprints” can 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.

It 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 said.

About the allocation of the freezer quota, 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.”

– Background reporting by Kveikur