Partners square off in fishing-rights dispute

A Namibian fishing rights holder is accusing Atlantic Pacific Fisheries (APF), the mother company of the Chinese-based Brandberg Namibia Investments (BNI), of taking rights holders for a ride. The firm further alleges that local quota holders could lose millions due to ‘unethical business dealings” by the management of the APF. According to a source, the involved joint ventures, representing over 3 000 individuals, brought a number of contentious issues under the attention of the Minister of Fisheries and Marine Resources Bernard Esau in May this year. He advised the Namibian joint ventures to go back to the drawing board and iron out differences with the partners. The Namibian shareholder alleges that the Chinese business partners are exploiting them by manipulating company policies and procedures for their own benefit. The profit split apparently also does not reflect that the Namibians are the majority shareholders. The APF board has said it has nothing to hide and says the processes it is engaged in are transparent and guided by the Companies Act. According to the board, profit and revenue sharing points out that Namibian joint ventures earn and own more. Some of the Namibians, however, say they are not sure what their Chinese partners are trying to achieve. “They want to have 50/50 representation in the joint venture company, provide no usage fee to quota holders - only profit sharing - and at the same time make use of our quota to maintain and repair their vessel, refuel their vessel and pay all the salaries of the employees of the operating company,” they allege. “We are not sure if this will work. The Chinese are bringing nothing to the table. “They do not want us to be part of the operating company, neither to be part of the marketing arm, nor do they want BNI to be under the chairmanship of a Namibian. There is also no commitment from their side, hence a new proposal was drafted with the structure singling out BNI as an independent entity with the vessel F/V Leader as its asset and no longer part of APF, but still in charge with managing and marketing our quota as usual.” APF consists of South Pan (made up of three Namibian-based joint ventures with a majority 51% shareholding stake) and BNI which is allegedly Chinese-owned board-controlled body despite being the minority (49%) shareholders. Through the horse mackerel quotas held by its shareholders, APF conducts fishing, processing operations, as well as distribution and sells its high-quality horse mackerel products under the Pelican brand in many African countries. A representative of one of the Namibian joint ventures, which jointly owns 9% shares in the vessel MV Leader, says he is afraid that the three companies could lose the vessel and investments totalling approximately N$206 million, should bankruptcy be declared. The board, however, refuted this, saying its members were questioned by the fisheries minister about the truth of the allegations levelled against it. “The bankruptcy in question is not a traditional or ordinary bankruptcy. It’s a Chapter 11 protection against bankruptcy which is a positive thing to safeguard interests and strengthen the company to ensure positive results.” Minister Esau confirmed that he was aware of the fact that there was some litigation ongoing. “We are monitoring the situation and keeping a close eye on it and the issue. APF is a global company and operates not only in Namibia but also in other parts of the world. “We hope and pray that the results of the litigation will not affect local operations.” The Namibian joint ventures say they only learned via a report published in undercurrentnews.com on 8 July 8 that four banks requested a US court to install a trustee at Pacific Andes International Holdings (PAIH) which owns BNI as well as other subsidiaries (for discussion and verification) after allegedly finding US$1 billion in “questionable transactions” and “substantial” fabrications of revenue and payments. Bankruptcy China Fishery Group, the parent company of Pacific Andes International Holdings along with 14 affiliated firms filed for bankruptcy in a New York court on June 30 in a bid to restructure the financially troubled fishing conglomerate. In a motion filed by lenders, which include Rabobank, Standard Chartered Bank, CITIC Bank International and DBS Bank, they seek the removal of the current management of the 16 PAIH entities which filed for bankruptcy. Bloomberg recently reported that the value of China Fishery Group’s bonds dropped 16% since the June bankruptcy filing amid fears that sale of the Peru assets won’t be enough to repay creditors. China Fishery’s US$300 million worth of bonds due in 2019 were recently priced at 53 American cents on the dollar while bonds for Pacific Andes Resources Development were priced at 20 cents to the Singaporean dollar, the news service said. Both bonds are in default. The local APF board also responded to a number of other issues and allegations levelled against it by members of the affected joint ventures and pointed out that a statement by Esau labelling the MV Leader Namibian flagged and owned during its launch were incorrect. ‘Misquoted’“The minister was not correctly quoted. The vessel is not Namibian flagged. APF bought MV Leader in 2013 and launched it in May 2014 after it was 100% sold. The vessel belongs to a company called Perun with APF also listed on the ship register. Namibians are thus not the majority shareholders of the vessel. We currently employ more than 300 people and are in the process of obtaining land to meet the soon to be implemented scorecard requirements by the Ministry of Fisheries and Marine Resources. According to a source, a Namibian company valuated the MV Leader at N$66 million. The Chinese opted for valuations from China and South Africa which totalled N$206 million three times the value determined by the Namibian firm. The board refuted this and said that two valuations were done in Spain and Namibia respectively. If the need arises, a third evaluation can be done, but not at the request of the shareholders. Esau said that in terms of the ownership of the vessel, Pacific Andes is not the rights holding company and does not have any fishing rights in Namibia. They are also not entitled to quotas. “The issue of beneficial ownership of vessels is also a determining criterion which determines how quotas are allocated. Any company that takes the Namibian fishing industry and government for a ride and where the ownership of the vessel has been diluted, will be audited and verified. Those found guilty will carry the consequences.” The minister pointed out that fishing rights are with the three Namibian JVs, quotas were allocated to them and said they hold seven-year rights. “The scorecard process is being finalised and we will converge for the third and final round of consultations with the industry soon. This mechanism will enable us to establish whether Namibians who received quotas are serious or just in it to make immediate profits for themselves. “Namibian fishing rights holding companies will also be evaluated based on what they have they have done for seven years since receiving the rights.” The minister further said that he had informed new rights holders when allocating rights that they should try to have shares in vessels and beneficial ownership. Esau said that he had advised companies to try and gain control as rights holders due to the empowerment aspect, and also to add value to fish that is being landed in order to create the necessary jobs on land. Warned“I told them on numerous occasions to get involved in marketing fish products locally and internationally. Namibian fish should be followed from the sea to the markets. If price transfers occur, this translates to jobs being transported and Namibian companies are intentionally being run at a loss on Namibian soil with fish being sold to companies abroad for profits. This also leads to tax evasion.” A member of the Namibian JVs also raised suspicion regarding salaries and the operational costs which are allegedly inflated and said this was another aspect which could result in rights holders loosing exorbitant amounts of money. According to a source, a questionable tender was apparently issued by the APF for demolishing and clearing the area where a land-based processing plant will be constructed in Walvis Bay. This transaction is allegedly shrouded in irregularities. In response to allegations of mismanagement the board said that issues pertaining to operational costs are dealt with by the management and not by the directors. “The persons running the technical side of the business are trained, qualified and very capable individuals. The board put a strict financial policy in place to which the company adheres and it conducts regular audits. Our procurement policy dictates quotes have to be obtained and it has authorisation limits. Payments are signed by more than one signatory with the commercial manager being one of the signatories. Opportunity for mismanagement however exists with suppliers trying to manipulate the procurement process.” The board also responded that it could not reveal the identity of the company which was involved in awarding an N$1 million land clearing tender without obtaining permission. “The tender did not amount to N$5 million. This is a lie. The property belongs to a private individual and the company is busy buying it. We initially wanted to purchase 75% shares. The owner produced three quotes which varied from N$3.7 to N$5 million for the clearing operation and put a team of professionals together consisting of engineers and architects. He subsequently decided to sell 100% of the property.” - Additional sources undercurrentnews & BloombergOtis Finck

Partners square off in fishing-rights dispute

Comments

Namibian Sun 2025-06-23

Please login to leave a comment

Partners square off in fishing-rights dispute

Comments

Namibian Sun 2025-06-23

Please login to leave a comment

Login