Samherji refutes latest exposé of Namibian operations

An article published this week by investigative journalism training project Finance Uncovered, examining the operations of companies in Namibia affiliated with Samherji, has been criticized by the Icelandic fisheries company for containing many factual errors as well as recycled, previously published material.

In a statement published on 21 July, Samherji Co-CEO Björgólfur Jóhannsson said the company had been corresponding with Finance Uncovered over the past three months, but that many of the allegations made in the article entitled “A fishy business: shifting profits out of Africa” revealed “complete misunderstandings” of international business operations.

“Finance Uncovered has emphasized that they are not accusing Samherji of anything illegal, and it is important to underline the fact that Samherji is not accused of tax evasion in the article that was published yesterday. Some elements of the group’s tax-planning methods are put in a negative context and portrayed as abnormal,” he said.

The article, published on 20 July, also uses leaked documents that were uploaded to Wikileaks last year by the former managing director of Samherji’s companies in Namibia, Johannes Stefansson. It claims that “Samherji appears to have reduced its taxable profits in Namibia was by sending hefty fees to its companies in other jurisdictions.” 

Jóhannsson’s statement addresses a number of what the company calls factual issues appearing in the story, asserting that:

  1. Samherji has never sold sardines or mackerel to the retail chains Carrefour and Tesco, and has never caught sardines in Namibian waters. That activity was conducted in Morocco for a brief period of time.
  2. Intra-company sales of fish products through Cyprus only occurred in 2012, during Samherji’s first year of operations in Namibia, when its affiliated companies were building relationships and partners in the country. Also, the numbers in the story regarding discounts are incorrect, while the average mark-up in sales through Cyprus was 3.9 percent in 2012.
  3. Statements regarding a charter agreement with Atlantex for a vessel used in Namibian operations are incorrect. The vessel in question was chartered for a brief period under a time charter or full-service lease. Also included in the charter fee were equipment, oil, and maintenance services. Samherji said the story correctly stated the charter fee was reduced after 4.5 months, and Atlantex made a net income equivalent to only a 6 percent mark-up.
  4. Total taxes paid in Namibia over the years by entities that Samherji was invested in, including income tax, employee tax, export levies, import levies, social security, and a number of other payments made to the Namibian state, exceeded NAD 400 million (USD 24.3 million, EUR 21 million). Samherji said these taxes were paid despite Samherji's operations in Namibia being ultimately unprofitable and lossmaking.

The company chief also criticized the article for making standard practice appear suspicious.

“They have ignored the obvious fact that multinational companies use specific subsidiaries and structures to minimize the spread of legal tax and operational risk. Completely legitimate, well-founded commercially, and standard structures are all read in light of alleged questionable tax planning,” he said.

However, his statement concludes by saying that Samherji does not disregard the possibility of historic mistakes made in its subsidiaries' Namibian operations.

"On top of ceasing all operations in Namibia last year, and on top of putting massive efforts and resources into investigating the allegations we were faced with in 2019, the Samherji group already in January this year launched plans to build a state-of-the-art, group-wide compliance program that is aimed at making us a global leader within compliance, governance and internal control in the fisheries industry. Finance Uncovered's pursuit does not alter or have any impact on these ambitions,” Jóhannsson said.

Samherji launched an internal investigation into its Namibian activities in light of allegations of bribery made by Stefánsson in November last year. At the same time, WikiLeaks published thousands of documents claiming to expose corrupt schemes by the company to gain access to rich fishing grounds in the country.

Also in November, Samherji CEO Thorsteinn Már Baldvinsson temporarily vacated the position while the internal investigation was being conducted. He returned in March, working alongside Jóhannsson to help guide the company through the COVID-19 coronavirus crisis. In the meantime, the company announced plans to step up its corporate governance and compliance systems in response to the alleged wrongdoings in Namibia.

The company’s investigation in Namibia has been supported by the Norway-based law firm Wikborg Rein. 


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