MD defrauds fishing firm of N$4.5m

30 January 2014 Author   Da’oud Vries

front Castro 31 janA Namibian fishing company’s operations have come to a standstill after its Cameroonian-born partner and managing director defrauded it of millions of dollars. The company has been unable to pay its sea-going workers and it has debts with other creditors for non-payment of services. The company, JCS Seafood, is about to lose its vessel because the MD took a loan of N$4.5 million from Atlantis Fisher Namibia and used the company’s fishing vessel as security.

The Cameroonian-born Castro Ayuk-Arrey, who is a director of JCS Seafood together with other Namibian shareholders, forged two board resolutions that claimed he had authorisation from the company directors to borrow money from Atlantis Fisher Namibia.

The forged resolutions said that Ayuk-Arrey was duly “authorised to sign all relevant documents and attend to all such acts required for and on behalf of the company for the registration of a Mortgage Bond for an amount of N$4,516,263”.

The fake board resolution, according to documents in the possession of the Windhoek Observer, empowered the MD to mortgage JCS Trawling One and the board supposedly passed it on 24 June 2013.

Before the June 2013 fake resolution, there was a preceding decision of 10 September 2012, which also empowered Ayuk-Arrey to take out a loan from Atlantis Fisher.

Ayuk-Arrey has admitted to his directors that the resolutions were fake and that he drafted them without their knowledge.

It has also come to light that the MD had resorted to taking advances from cash loan businesses.

He took out a loan of N$100,000 from Rinu Financial Services, which according to documents provided to the Windhoek Observer, belongs to a friend of his.

He borrowed the N$100,000 from the cash loan in June/July 2013 and the interest now stands at N$160,000.

According to the other directors of JCS, the MD admitted that he was not “authorised to obtain the loan”.

In one of the documents, the directors say that a cash loan company “is obviously not the preferred entity to be approached by a company of the magnitude of JCS Seafood CC”.

The conduct of Ayuk-Arrey has not only left the company cash-strapped, but has tarnished the image of the company to the point that “financial institutions, specifically commercial banks do not have faith in the managing director and are not comfortable doing business with him”, the shareholders say.

The company has opened a case of fraud against Ayuk-Arrey and he appeared in the Walvis Bay Magistrate’s Court on November 22.

The court granted him bail of N$20,000 and postponed his case to this year.

He subsequently left the company on October 9. “The managing director opted to resign and relinquished his shares,” according to the other directors.

However, he has left the company with debts that have brought it to its knees.

It has not paid its workers since last year, and its vessel has remained anchored at Walvis Bay port since October and it may be sold off if the company does not settle its debt with Atlantis Fisher.

The company is not clear on whether the former MD only owes N$4.5 million to Atlantis Fisher since there were two resolutions taken - one in September 2013 and the other in June 2013.

It is also not clear whether he used these loans to bankroll the operations of the company, since the company had been in financial trouble for a long time.

JCS Seafood in an effort to repair its tarnished image in the fishing industry, especially with workers, creditors and the Ministry of Fisheries has engaged in a series of meetings to salvage the situation.

Meanwhile, the unpaid workers of JCS have demanded their salaries and even called on the Ministry of Fisheries not to grant a fishing quota to the company any longer.

According to media reports at the coast, the company’s employees accused the MD of empty promises and unfair labour practices.

The workers told the Namib Times that they only received payslips for August and September but no pay, while others had not received their pay since July.

The company is set to conduct a forensic audit into its books and it has given assurances to its workers that the company will pay them, according to Namib Times.

WINDHOEK OBSERVER

The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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