15 February 2013

Namibia: Two Governors in Shares Fight

OSHANA Governor Clemens Kashuupulwa and his counterpart in Otjozondjupa, Samuel Nuuyoma, are involved in a tug-of-war over share allocations in a fishing company that has allegedly paid dividends of nearly N$6 million in the last two years.

The two are shareholders of a fishing company called Oshana Marine Enterprises which was among many that received fishing rights from the Ministry of Fisheries and Marine Resources in 2011.

The Namibian understands that Nuuyoma is part of a group that is accusing Kashuupulwa and some business partners of illegally allocating themselves a large chunk of the company's shares as well as engaging in other dubious business practices.

Business partners of the Windhoek-based company are mainly pointing fingers at Kashuupulwa and another founding member of Oshana Marine, Abner Nambombola, saying the two used their long experience in getting fishing quotas and rights to "cheat" them out of shares.

In particular, Kashuupulwa's accusers claim he and Nambombola held shareholders' meetings without everyone present, where they changed the share allocations from what was originally agreed. The accusers suggest the two kept them in the dark over details of payments made to them and for corporate social responsibilities.

Nambombola, who is a chief executive officer of another company called Peace Garden, owned by one of the disgruntled shareholders David Nghipunduka, denied allegations that he had done unethical business. Kashuupulwa declined to comment, referring queries to Nambombola.

Asked about the meetings he held without other shareholders, Nambombola said they found it necessary to change the business from a close corporation to a limited liability company. In doing that, he consulted the lawyers and company secretary about changing from a close corporation and thus held a meeting not attended by other shareholders.

Kashuupulwa became agitated when pressed for comment: "The information you got from Nambombola is enough. It's enough, I have no other comment. Don't you understand English?"

Nuuyoma also declined to comment, referring The Namibian to Nambombola and Kashuupulwa for comment.

According to Nambombola, the disgruntled shareholders had unrealistic expectations of the dividends. He said the shares allocated to members remained the same as was originally agreed. "Nothing changed, the shares allocation was not changed," he said.

The disagreements in Oshana Marine are a microcosm of what seems widespread among new entrants in the fishing industry who complain of being "cheated" by those who have been in the business longer.

The Ministry of Fisheries in 2011 forced fishing companies into joint ventures, ostensibly to accommodate more people in the fishing industry through fishing rights and quotas.

Many of these joint ventures are now feuding over allocations of shares, dividends and sales of fishing quotas.

The ministry is also facing criticism for allowing the companies to auction off quotas to the highest bidders.

The minister of fisheries and marine resources, Bernard Esau, recently warned that there is very little room for wriggling out of the joint ventures.

Oshana Marine Enterprises was formed in 2004 and converted to a company in August 2011. Four months later, it was made part of a joint venture known as Escalate Investments in the hake industry. The other companies in the joint venture are Proactive Investments, Internam Aqua Resources and Brama Brama Fishing.

Compounding the disagreements is that some shareholders believe that Oshana Marine Enterprises has received dividends of about N$6 million from the joint venture. But Nambombola said Oshana Marine had received dividends of N$709 000 and N$600 000 in the past two years.

He said the joint venture had paid dividends totalling about N$3.1 million in 2012 and N$2.8 in the past two years and the amount was divided among the five companies.

Shares in Oshana Marine Enterprises were distributed as follows: 15% to Nambombola, 8% to David Nghipunduka, 7% to Kashuupulwa, 6% to Nuuyoma, 5% to Josephat Sinvula, 5% to Robanus Amadhila, 5% to Blasius Kandjumbi and 7% to Lidwine Tuyeni.

"The bottom line is that most new entrants have no clue about how the industry works. So those with inside knowledge take advantage," said a person in the industry who is not related to the Oshana Marine Enterprises.

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