Widows expose fishy deal
Fisheries minister Bernhardt Esau says an ongoing saga, which has seen a widows' trust effectively being used as window dressing to rake in fishing rights, is just the tip of the iceberg when it comes to trickery in the industry.
A group of 111 fishermen widows, who on paper have 40% shareholding in a fishing company since 2012, have lifted the veil on how they were initially paid a monthly stipend of N$1 400 each, which was then reduced to N$700 in 2016 and then stopped.
They have received no dividends, as the majority shareholders in Ehika Fishing.
In the meantime, Ehika Fishing, which is run by it managing director Rojo van Wyk, was given a N$17 million loan from the Development Bank Namibia (DBN) to finance the construction of a cold storage facility in Narraville, which was not discussed with the widows.
Van Wyk's excuse is that the payments to the widows were “redirected to raise an additional N$22 million that was needed for the construction of infrastructure that will add value to the horse mackerel industry”. The shocking chain of events, which fisheries minister Bernhardt Esau has described as prevalent in the fishing industry, have emerged only after the Fishermen Widows Trust (FWT) complained to his office about what amounts to window dressing, in order to rake in fishing rights.
Esau informed the widows that records at his ministry indicate that FWT has a 40% stake in Ehika Fishing, which is involved in a fishing rights joint venture (JV) with Mack Fishing, while Rojo van Wyk holds 30% shareholding, Eddie van Wyk 15% and Clive Johannes 15%.
Johannes has since died and his children have inherited his shareholding.
The minister has now directed Rojo van Wyk to facilitate the full operation of widows' trust and that its officials should be elected by the widows.
A bank account should also be opened, which will be operated solely by the widows.
Esau also instructed Ehika Fishing to see to it that the widows' trust is represented on the company's board of directors and at all levels, proportional to their shareholding.
The minister further requested the company to submit audited financial and bank statements showing how dividends (profits) were shared in Ehika Fishing since 2012, to date.
“In the event that FWT did not receive proportionate share dividends, all such balances must be deposited in the bank account of the trust immediately. I also want written justification for the monies supposedly redirected by the company to investments. This must be satisfactory to both the company and FWT,” Esau instructed Van Wyk via a letter dated 23 February.
'Breach of conditions'
Esau said he considered the non-regulation of the trust in the company as a breach of conditions of the fishing rights awarded in terms of the Marine Resources Act 2000, considering the fishing right was issued on the strength of the FWT.
“In this regard your right is not suspended but no fishing quotas will be allocated to your company until these issues are addressed to the satisfaction of the current management of Ehika Fishing and the FWT.”
Esau requested Van Wyk to submit the resolutions countersigned by representatives of the widows' trust, as part of the board management of the company, within 21 days, on each of the matters indicated in the letter addressed to him. The minister had a meeting with Van Wyk and representatives of the trust on 15 February in Walvis Bay.
During the meeting, it was established that the Ehika Fishing board of directors does not have any representatives of the windows' trust, despite their 40% shareholding.
The widows are therefore excluded from decision-making processes, as per the Companies Act of 2004, and are hence unable to exercise their rights in the company.
Members of the widows' trust previously raised a number of concerns with the minister on 17 November 2017. Esau subsequently had a meeting with 34 members of the trust, when he attended the launch of the Ehika cold storage facility in Narraville.
During the meeting, the widows informed the minister that there was no communication between them and Ehika.
“We are not properly informed about the deed of trust and there is no accountability in terms of the operations and money that was supposed to flow to us as 40% shareholders. We would like to know where the share certificates are. The payments we received were first halved and then stopped. Ehika also takes decisions without involving us and we are not represented at board level. The election of trustees is also problematic,” the widows told Esau.
The minster then resolved to convene a meeting with other shareholders and invited Rojo van Wyk to the meeting on 15 February in Walvis Bay.
“I discussed your issue with officials from the ministry and instructed them to compile a report with recommendations. They also had to determine if the FWT has shares. This was confirmed and depends on the application that was made at the time of acquiring the right,” Esau told the widows.
He also expressed his dissatisfaction with clause 7 in the deed of trust and said it was not democratic, since it does not give the widows, who are the actual owners, the right to decide and have a say in the running of the trust.
“Rights and share ownerships are being taken away from people and this is a concern. This is a serious issue and resulted in complaints.
The law empowers me to act and I will surely do so. The widows must be recognised as the backbone of the company. I want you to establish a democratic trust and involve everybody on way forward. The advisory committee must be reinstated and quarterly reports should be submitted to me.”
'Funds deferred'
Van Wyk explained that the widows' money was used to finance the construction of the cold storage facility.
“Ehika applied for a N$27 million loan from the Development Bank of Namibia and received only N$17 million. Payments to the beneficiaries did not stop and will not be stopped. It was only redirected to raise an additional N$22 million that was needed for the construction of infrastructure that will add value to the horse mackerel industry.”
Esau emphasised that the FWT must be owned by the widows, as an independent autonomous body that owns a 40% shareholding in Ehika.
“The board of trustees for the FWT must be established separate from that of the Ehika company management and the beneficiaries must define them. The widows must acquaint themselves with the trust deed. A workshop should be conducted to explain its contents. If things are properly in place, financial institutions will go into business with the company or trust. It could also finance other business ventures.”
Based on the answers supplied by Van Wyk, special advisor to the fisheries minister, Stephen Mbithi, concluded that the trust deed was developed by lawyers without the actual participation of the widows.
“It belongs to widows but they were not part of its development. The investment into a cold storage should have been discussed with the widows and only then a decision could have been taken. That is the correct legal position. If money was spent according to management, the bank and financial statements must attest that no other shareholder received any dividends.”
The minister subsequently extended a two-week grace period to Ehika Fishing, while requesting that the company report back to him about issues of accountability, communication, the deed of trust and the composition of its board of trustees.
Responding to a request for official comment on the unfolding saga, Esau warned right holders not take their former disadvantaged shareholders for a ride. “It is not only Ehika, which is a right holding company in a JV with Mack Fishing that is doing this. I am aware that there are others doing the same. This is happening in Walvis Bay and throughout Namibia and it is a very sad situation.”
Esau said that he would deal with such companies accordingly, and in line with the criteria on the fishing rights scorecard related to 'Namibianisation', the control of companies, the beneficial control of vessels and corporate social development.
“All these aspects are part of the scorecard and the eight criteria and the sub-criteria will be availed in due time, as soon as the consultation process is concluded. The matter is with cabinet now.”
OTIS FINCK
They have received no dividends, as the majority shareholders in Ehika Fishing.
In the meantime, Ehika Fishing, which is run by it managing director Rojo van Wyk, was given a N$17 million loan from the Development Bank Namibia (DBN) to finance the construction of a cold storage facility in Narraville, which was not discussed with the widows.
Van Wyk's excuse is that the payments to the widows were “redirected to raise an additional N$22 million that was needed for the construction of infrastructure that will add value to the horse mackerel industry”. The shocking chain of events, which fisheries minister Bernhardt Esau has described as prevalent in the fishing industry, have emerged only after the Fishermen Widows Trust (FWT) complained to his office about what amounts to window dressing, in order to rake in fishing rights.
Esau informed the widows that records at his ministry indicate that FWT has a 40% stake in Ehika Fishing, which is involved in a fishing rights joint venture (JV) with Mack Fishing, while Rojo van Wyk holds 30% shareholding, Eddie van Wyk 15% and Clive Johannes 15%.
Johannes has since died and his children have inherited his shareholding.
The minister has now directed Rojo van Wyk to facilitate the full operation of widows' trust and that its officials should be elected by the widows.
A bank account should also be opened, which will be operated solely by the widows.
Esau also instructed Ehika Fishing to see to it that the widows' trust is represented on the company's board of directors and at all levels, proportional to their shareholding.
The minister further requested the company to submit audited financial and bank statements showing how dividends (profits) were shared in Ehika Fishing since 2012, to date.
“In the event that FWT did not receive proportionate share dividends, all such balances must be deposited in the bank account of the trust immediately. I also want written justification for the monies supposedly redirected by the company to investments. This must be satisfactory to both the company and FWT,” Esau instructed Van Wyk via a letter dated 23 February.
'Breach of conditions'
Esau said he considered the non-regulation of the trust in the company as a breach of conditions of the fishing rights awarded in terms of the Marine Resources Act 2000, considering the fishing right was issued on the strength of the FWT.
“In this regard your right is not suspended but no fishing quotas will be allocated to your company until these issues are addressed to the satisfaction of the current management of Ehika Fishing and the FWT.”
Esau requested Van Wyk to submit the resolutions countersigned by representatives of the widows' trust, as part of the board management of the company, within 21 days, on each of the matters indicated in the letter addressed to him. The minister had a meeting with Van Wyk and representatives of the trust on 15 February in Walvis Bay.
During the meeting, it was established that the Ehika Fishing board of directors does not have any representatives of the windows' trust, despite their 40% shareholding.
The widows are therefore excluded from decision-making processes, as per the Companies Act of 2004, and are hence unable to exercise their rights in the company.
Members of the widows' trust previously raised a number of concerns with the minister on 17 November 2017. Esau subsequently had a meeting with 34 members of the trust, when he attended the launch of the Ehika cold storage facility in Narraville.
During the meeting, the widows informed the minister that there was no communication between them and Ehika.
“We are not properly informed about the deed of trust and there is no accountability in terms of the operations and money that was supposed to flow to us as 40% shareholders. We would like to know where the share certificates are. The payments we received were first halved and then stopped. Ehika also takes decisions without involving us and we are not represented at board level. The election of trustees is also problematic,” the widows told Esau.
The minster then resolved to convene a meeting with other shareholders and invited Rojo van Wyk to the meeting on 15 February in Walvis Bay.
“I discussed your issue with officials from the ministry and instructed them to compile a report with recommendations. They also had to determine if the FWT has shares. This was confirmed and depends on the application that was made at the time of acquiring the right,” Esau told the widows.
He also expressed his dissatisfaction with clause 7 in the deed of trust and said it was not democratic, since it does not give the widows, who are the actual owners, the right to decide and have a say in the running of the trust.
“Rights and share ownerships are being taken away from people and this is a concern. This is a serious issue and resulted in complaints.
The law empowers me to act and I will surely do so. The widows must be recognised as the backbone of the company. I want you to establish a democratic trust and involve everybody on way forward. The advisory committee must be reinstated and quarterly reports should be submitted to me.”
'Funds deferred'
Van Wyk explained that the widows' money was used to finance the construction of the cold storage facility.
“Ehika applied for a N$27 million loan from the Development Bank of Namibia and received only N$17 million. Payments to the beneficiaries did not stop and will not be stopped. It was only redirected to raise an additional N$22 million that was needed for the construction of infrastructure that will add value to the horse mackerel industry.”
Esau emphasised that the FWT must be owned by the widows, as an independent autonomous body that owns a 40% shareholding in Ehika.
“The board of trustees for the FWT must be established separate from that of the Ehika company management and the beneficiaries must define them. The widows must acquaint themselves with the trust deed. A workshop should be conducted to explain its contents. If things are properly in place, financial institutions will go into business with the company or trust. It could also finance other business ventures.”
Based on the answers supplied by Van Wyk, special advisor to the fisheries minister, Stephen Mbithi, concluded that the trust deed was developed by lawyers without the actual participation of the widows.
“It belongs to widows but they were not part of its development. The investment into a cold storage should have been discussed with the widows and only then a decision could have been taken. That is the correct legal position. If money was spent according to management, the bank and financial statements must attest that no other shareholder received any dividends.”
The minister subsequently extended a two-week grace period to Ehika Fishing, while requesting that the company report back to him about issues of accountability, communication, the deed of trust and the composition of its board of trustees.
Responding to a request for official comment on the unfolding saga, Esau warned right holders not take their former disadvantaged shareholders for a ride. “It is not only Ehika, which is a right holding company in a JV with Mack Fishing that is doing this. I am aware that there are others doing the same. This is happening in Walvis Bay and throughout Namibia and it is a very sad situation.”
Esau said that he would deal with such companies accordingly, and in line with the criteria on the fishing rights scorecard related to 'Namibianisation', the control of companies, the beneficial control of vessels and corporate social development.
“All these aspects are part of the scorecard and the eight criteria and the sub-criteria will be availed in due time, as soon as the consultation process is concluded. The matter is with cabinet now.”
OTIS FINCK
Comments
Namibian Sun
No comments have been left on this article