BY: Wonder Guchu
Fishcor board chairperson Mihe Gaomab II said the Seaflower Pelagic Processing was a creation of a deal between Addrian Louw, Sacky Shanghala, Bernard Esau and James Hatuikulipi meant to make them a lot of money.
Gaomab said this in his affidavit in the case where Fishcor has taken the African Selection Fishing, Seaflower Pelagic Processing, the fisheries minister, and public enterprises minister to the High Court.
The affidavit is dated 19 August 2021.
Fishcor owns 40% in Seaflower Pelagic Processing, while the other 60% is owned by the Angolan-based African Selection Fishing.
Fishcor wants to terminate the relationship with Seaflower Pelagic Processing that was solemnised by the former fisheries minister Bernard Esau in May 2017.
Gaomab wants the court to order that the co-operation agreement; the shareholders agreement and the quota agreement between Fishcor on one hand and Seaflower Fishing, Seaflower Pelagic and fisheries minister on the other hand be declared contra bonos mores, in fraudem legis and thus unenforceable.
The shareholder agreement meant that Fishcor would provide 50 000 tons of horse mackerel to Seaflower Pelagic Processing for an initial period of 15 years and a further renewal period of a further 15 years.
Under the quota agreement, Fishcor was supposed to make available a minimum of 50 000 tons of horse mackerel per annum for the catching and commercial exploitation by Seaflower until 2033.
The co-operation agreement signed on 18 November 2015, gave effect to section 5 of the Fishcor Act in exploiting marine resources for the benefit of the State.
The agreement also envisaged certain projects, including the establishment of a land-based processing plant and the acquisition of a suitable vessel for the harvesting of horse mackerel.
In fact, when Esau announced the partnership, he said that Seaflower Pelagic would help in designing, constructing, and operating a land-based plant that would process 600 tonnes of horse mackerel every day.
“Without the co-operation agreement in place, there is no contractual basis obliging government to provide Fishcor with an annual guaranteed quota of 50 000 metric tons of horse mackerel for the forthcoming years,” Gaomab said in the affidavit.
Gaomab also wants the court to confirm the cancellation of all the agreements that were a result of the partnership between Fishcor and Seaflower Pelagic, and Seaflower Fishing.
The Seaflower Board
The Seaflower Pelagic Processing board of directors were James Hatuikulipi, Addrian Louw, lawyer Maren de Klerk, former Fishcor CEO Mike Nghipunya and Angolan Johannes Augustinus Breed.
At the time of the formation of Seaflower Pelagic, Hatuikulipi was the chairperson.
Currently, Hatuikulipi, Esau and Nghipunya are currently in custody after they were arrested on various charges including fraud and tax evasion in what has become known as the fishrot scandal.
De Klerk is holed up in South Africa where he has been since early 2020. He is, however, wanted in Namibia to answer to fraud charges.
When Gaomab became the acting board chairperson, he automatically became a board member of Seaflower Pelagic Processing.
But in August 2020, he and another board member Ruth Herunga resigned from the board with immediate effect, citing conflict of interest because of litigation against the Fishcor by Seaflower Pelagic Processing.
The pelagic processing company had gone to court demanding that Fishcor should honour all the agreements entered into before the arrest and incarceration of Hatuikulipi, Esau and Nghipunya.
Seaflower Pelagic Processing was also threatening to dismiss workers if Fishcor failed to honour the agreements.
Amid concern over the viability of the business, government in June and August 2020, awarded Seaflower Pelagic 5,000 and 4,000 metric tonnes for exclusive use in its factories in order to ensure the company does not lay off all of its workers.
Unsatisfied with the government’s gesture, Seaflower Pelagic Processing took Fishcor to court arguing that the agreement ensures that it would receive 50,000 metric tonnes of horse mackerel annually until 2033.
The company also wanted the court to stop the government from auctioning fishing quotas, but the deputy Judge President Hosea Angula dismissed the application.
In his ruling, Angula described the case brought by Seaflower Pelagic Processing against the fisheries ministry, as being part of a desperate bid to retain its beneficial relationship with Fishcor.
The deputy judge asked why Seaflower Pelagic Processing had failed to apply for fishing quotas like other fishing companies, questioning its claims that failure to receive the Fishcor quota will impact its operations.
“What is clear is that those who were the directing mind of the applicant at the time of the conclusion of the agreements between the applicant and Fishcor, as industry experts hand-picked by Fishcor, ought to have known that the undertaking by Fishcor to make available 50,000 mt every year for 15 years would only be possible under a corrupt environment. It is not viable under a regime where there is a strict compliance with the law, particularly with the provisions of the Marine Resources Act,” he said.
Gaomab, who welcomed deputy judge Angula’s ruling then, said Fishcor had nothing to with the agreements signed with Seaflower Pelagic Processing.
He indicated at the time that Fishcor would pursue legal options to sever ties and terminate all non-beneficial agreements.
According to Gaomab at the time, the fact that they cannot trace government’s return on investment in terms of the 50 000 metric tons given to Seaflower Pelagic Processing is one of the reasons why they want to end the agreement.
