Audit firm ‘knew’ of Fishcor thievery
Fishcor auditors only reported suspicion of dodgy transactions nearly three months after the arrest of the Fishrot Six in November 2019.
19 January 2021 | Crime
Stier Vente Associates, external auditors for beleaguered state fishing company Fishcor, only reported the suspicious Fishrot-related transactions to the Public Accountants’ and Auditors’ Board (PAAB) on 21 February 2020, long after the scandal had been reported in local and international media.
Namibian Sun understands that Stier Vente Associates, in its submission to PAAB - a statutory board regulating the accountancy profession in Namibia – claimed it had been misled by former fisheries minister Bernard Esau, who said the money was taken out of the company to fund ‘government objectives’.
Pressure is piling on Stier Vente Associates, who are increasingly facing questions on how they did not detect N$75.6 million leaving Fishcor coffers, a scheme that was set in motion as far back as August 2014. The audit firm declined to comment yesterday, citing client confidentiality.
Section 26(3)(a) of the Public Accountants’ and Auditors’ (PAA) Act No. 51 of 1951 states that “if any person acting in the capacity of auditor to any undertaking is satisfied or has reason to believe that in the conduct of the affairs of such undertaking a material irregularity has taken place or is taking place which has caused or is likely to cause financial loss to the undertaking or to any of its members or creditors, he/she shall forthwith despatch a report in writing to the person in charge of that undertaking giving particulars of the irregularity, at the same time drawing the attention of such person in charge to the provisions of paragraphs (b) and (c) and requesting him/her to acknowledge receipt of such report in writing.”
Subsection 26 (3)(b) states that if the auditor is not happy with the reply or if the situation has not been remedied, they must then alert the PAAB, something Stier Vente Associates failed to do until the scandal became public.
The Act states that this action is at the discretion of the auditor. An amendment to this law is under way to compel auditors to report suspicious transactions, failing which they could face up to 10 years in jail.
Head of the PAAB secretariat Zaa Nashandi confirmed that Stier Vente Associates had reported its suspicion of transactions at Fishcor early last year. That was more than two months after Esau, former justice minister Sacky Shanghala and Fishcor board chairman James Hatuikulipi had been arrested over the same scandal in November 2019, and three days after Fishcor CEO Mike Nghipunya had been arrested on February 18 2020.
“Stier Vente and Associates Chartered Accountants reported a possible material irregularity at Fishcor… on 21 February 2020,” Nashandi told Namibian Sun upon inquiry yesterday.
After receiving the report from the audit firm, PAAB disclosed this information to the Office of the Attorney-General and the Anti-Corruption Commission (ACC), Nashandi said.
“No further duty rests on PAAB after material irregularity has been forwarded to relevant authorities,” he said, when asked what further action the secretariat took after receiving the report.
During Nghipunya’s bail bid in September 2020, the court indicated that the State had proven that there was a strong prima facie case in connection with the N$75.6 million that was syphoned out of Fishcor between August 2014 and December 2019.
In this particular matter, Nghipunya is charged alongside Esau, Shanghala, James Hatuikulipi, Esau’s son-in-law Tamson Hatuikulipi and Pius Mwatelulo.
On the charge of corruptly using office for gratification, the prosecution is alleging that Nghipunya, Esau, Shanghala and James Hatuikulipi used their offices or positions in a public body to obtain gratification to obtain N$75.6 million that was paid to them or entities of their choice between August 2014 and December 2019.
On the charge of fraud, the prosecution is alleging that Nghipunya, together with Esau, Shanghala and James Hatuikulipi, defrauded Fishcor and the government by channelling payments totalling N$75.6 million to themselves or entities of their choice.