Samherji lays bare Namibia operational “chaos,” CEO apologizes for Fishrot scandal

Samherji has laid bare some of the findings of an internal investigation into previous questionable dealings of its Namibian operations.

Samherji was alleged to have paid bribes to Namibian politicians and businessmen to gain unfair advantage and access to Namibian horse mackerel quotas.

Namibia is currently pursuing a cash-for-quota corruption case, popularly known as the “Fishrot” scandal, based on allegations made in late 2019 by Johannes Stefánsson, Samherji's former managing director of its Namibian operations. In November 2019, WikiLeaks published more than 30,000 documents obtained from Stefánsson, which the website claims “expose corrupt schemes by the company in Namibia to gain access to rich fishing grounds off the African country’s shores.”

Namibian authorities have charged 26 people, including former Namibian Fisheries Minister Bernhard Esau and Justice Minister Sacky Shanghala, with corruption, fraud, and money laundering, which took place between 2014 and 2019. Three current Samherji employees – Ingvar Júlíusson, Egill Helgi Árnason, and Adalsteinn Helgason – are also among those charged, and Namibia has sought their extradition. In response, Iceland Public Prosecution Deputy Director Helgi Magnús Gunnarsson that will not happen, citing a lack of an extradition treaty with Namibia.

Samherji Co-CEO Thorsteinn Már Baldvinsson revealed in a 22 June statement and apology the company’s affiliates in Namibia had “a lot of chaos in their operations, including regarding payments for fishing rights.” The fishing rights were allocated by Namibia’s state-owned fisheries company, National Fishing Corporation of Namibia (FISHCOR) between 2014 and 2019.

The Akureyri, Iceland-based seafood company said the Norwegian law firm Wikborg Rein, which conducted the investigation, found a former managing director “withdrew significant sums of cash from the companies’ accounts without any or proper explanation.” The cash, Samherji revealed, “was improperly used and the former managing director acknowledged this conduct and apparently various other criminal activities where Samherji companies were used.”

Samherji confirmed the company’s affiliates in Namibia carried out fishing activities within the African nation, but based on “catch quotas allocated by the Namibia government to a private company, Namgomar Pesca (Pty) Ltd (Namgomar Namibia).”

Namgomar was an entity established by government officials in Namibia and Angola in association with other individuals and who, Samherji found out later through investigation findings by Wikborg Rein, “made the arrangements for Namgomar Namibia to be allocated catch quotas based on a bilateral fisheries agreement between both countries (Namibia and Angola).”

But Samherji said it was neither aware who the owners of Namgomar were, nor was the company privy to the “actual ownership structure of Namgomar Namibia.”

Although Samherji confirmed its subsidiaries had dealings with Namgomar, its affiliates, the company did not organize “the structure of a bilateral agreement between Namibia and Angola in order to provide them with the improper benefits.”

Samherji said the Wikborg Ren findings revealed “part of the payments due to agreements with Fishchor [were] paid into accounts owned by third parties in connection with the so-called Fischor 'government objective' grant project of the government of Namibia.”

“Despite instructions from competent Fischor representatives, the investigation revealed that payments for fishing rights allocated to government funding projects were not always supported by invoices or linked to a specific government funding project,” Samherji said.

The company cited a trend where “payments for fishing rights, based on Namgomar Namibia's catch quotas, [were] payments to the company Tundavala Invest Ltd listed in Dubai.”

“It took the new management a long time to realize and understand the agreements that were made during the time the former managing director ran the operation,” Samherji said.

However, with time, the seafood company discovered the anomalies and “it was negotiated that all usage fees for fishing rights paid to Dubai would be stopped and the payments ended in 2017.”

Once new management took over at Samherji, “it gradually managed to take control of the operation in Namibia, understand and improve what went wrong, and eventually wind it down.”

Samherji said it regrets some of the business practices exposed by the Wikborg Ren investigation were not “stopped much earlier."

"Unfortunately, they were allowed to go on for far too long," it said.

Baldvinsson said the company “firmly rejects the allegations of bribery but accepts the criticism that in the circumstances, it was necessary to pay more attention to how payments were made, who they were made to and on what basis, who had the authority to give instructions about them, and where they should be received.”

He said the company’s board of directors has since adopted  “a compliance system that includes extensive and improved governance and compliance rules including a third-party management system with risk-based screening procedures of intermediaries and other third parties.”

Samherji’s management says it has since adopted a new strategy that would help protect the company from any questionable activity by individuals at the company.

“It is my and Samherji's firm position that no criminal offences were committed in Namibia by companies on our behalf or their employees, apart from the conduct that the former managing director has directly confessed to and acknowledged,” Baldvinsson said. “Nonetheless, as Samherji's top executive, I am responsible for allowing the business practices in Namibia to take place [and] I am very sorry that this happened, and I sincerely apologize to all those involved, both personally and on behalf of the company.”  

Photo courtesy of Samherji