Fishcor, Seaflower marriage ends in tears

24 September 2020 | Local News



A contract between Seaflower Pelagic Processing (SPP) and the National Fishing Corporation of Namibia (Fishcor) for an annual horse-mackerel quota of 50 000 tonnes remains binding until a court sets it aside or the partners renegotiate it.

Seaflower chairman AJ Louw said it is against this background that the fishing company wants to sue Fishcor for damages of N$255 million.

“Fishcor owes us 95 000 tonnes,” he said.

The agreement was signed by him and former Fishcor chairman James Hatuikulipi on 30 January 2017.

Louw is the CEO of African Selection Trust SA Group (AST), headquartered at Tombwa in the Angolan province of Namibe.

Seaflower was established in 2017 after Fishcor and AST signed an agreement under which a horse-mackerel plant would be established and fishing vessels would be acquired.

Fishcor holds 40% of the shareholding in Seaflower and AST 60%.

The agreement further stipulated that Seaflower must pay Fishcor a user fee of 8% per tonne in exchange for the quota it utilises.

Fishcor was responsible for ensuring that Seaflower received its 50 000-tonne horse mackerel quota every year until 2032.

Fishcor also had to buy the premises where Etale Fishing Company's factory used to be, where the Seaflower plant would be established.

“We did business with the Namibian government; not with one or two individuals. President Hage Geingob visited the Seaflower factory and said how impressed he was,” Louw said.

Making reference to the Fishrot bribery scandal that came to light in November 2019, he said: “I want to make it clear that we [AST] were not involved in Fishrot.”

Hatuikulipi is one of those arrested in connection with the scandal, along with former Fishcor CEO Mike Nghipunya, former fisheries minister Bernhardt Esau, former justice minister Sacky Shanghala and others.

Onshore processing

Louw said the idea was to process Namibian fish onshore instead of freezing it at sea for export.

“AST has been involved in Angola for 20 years, where we have bought up a number of fishing companies, and we also have interests in Mossel Bay, South Africa.

“We employ 1 800 people. We believe fish has to be landed. That is the trend worldwide, even in Russia,” he said.

According to Louw, Hatuikulipi was impressed with AST's factory at Tombwa, which is the largest onshore fish processing plant in Southern Africa, and proposed a partnership.

Seaflower recently failed to obtain a High Court interdict against the government to keep it from auctioning off the remaining 72 000-tonne horse-mackerel quota for the year.

According to court documents, Fishcor owes Seaflower about half of the 2020 quota that had been agreed upon.

In his ruling, Deputy Judge President Hosea Angula referred to the relationship between Fishcor and Seaflower as “cosy and parasitical”.

Louw denied this, saying the agreement between the two entities stemmed from cabinet decisions and notices published in the Government Gazette.

“We did not arrive at the scene after the table had been laid and nobody wanted to sit down. We brought the capital and the know-how and built the factory.

“We invested N$790 million, and then we were treated with contempt.

“In 2018, Seaflower saw nothing of the agreed 50 000 tonnes, and for 2019 and 2020 Fishcor owes us 20 000 and 24 334 tonnes respectively. That adds up to about 95 000 tonnes, worth N$255 million.”

Re-evaluating deals

Meanwhile, public enterprises minister Leon Jooste has confirmed that he had sent a letter to new Fishcor chairman Mihe Gaomab II on 4 September, instructing him to obtain a legal opinion on business agreements entered into by Fishcor.

“I sent letters to all the commercial state-owned enterprises, instructing them to evaluate all existing business agreements to determine whether correct procedures had been followed and whether these deals are in the interest of the enterprise and its shareholder,” Jooste said.

“If any such agreement does not meet these criteria, it must be renegotiated or terminated. The same goes for the Seaflower agreements. Unless I am convinced that they meet the requirements, I will not allow them to continue.

“The days when local or foreign business people could exploit state enterprises for their own benefit are over. I will not hesitate to use the powers vested in me to protect the state, and thereby the taxpayer.”

Gaomab said earlier this week that Fishcor's agreements were still being analysed and no decision had been made yet.

Jobs on the line

Louw said the jobs created by the joint venture are now at risk because of the uncertainty about the agreement.

“On 1 September, 450 people were supposed to have started working at the canning factory,” he said, adding that this figure was on top of the 655 jobs created previously.

Adolf Burger, Seaflower's managing director, said 95% of the company's employees are young people and about 70% are women.

Louw denied allegations that Seaflower had sold the additional quota allocated by the fisheries ministry earlier this year to protect local jobs.

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