The Namibian government will seize nearly N$3.6 million from the Zambian bank account of former Defence Force chief Lieutenant General Martin Shalli, who received the money from Chinese Company Poly Technologies as commission over the sale of a warship to the Namibian Navy.
The Namibian High Court issued an order for the forfeiture the money following a judgement which upheld a lower court ruling declaring all the money to be proceeds from the crimes of corruption, fraud, tax evasion and money laundering.
Shalli appeared before Justice Maphios Cheda charged with contravening the Prevention of Organised Crime Act by engaging in corruption, money-laundering, fraud and tax evasion following allegations that a net payment of US$359 526, defined as ‘commission’, was made into his Zambian account held with Standard Chartered Bank. An amount of US$1 389 was paid into another Zambian account belonging to colleague Elsie Ausiku. The payments were made between October 2008 and February 2009 by Chinese defence equipment manufacturer Poly Technologies Inc, which had just been contracted to supply the Namibian Defence Force with US$126.4 million worth of equipment, which included the flagship logistics support vessel NS Elephant. The money was frozen by Zambian authorities in May 2009.
Namibia took delivery of the 2 500-tonne ship, which is armed with a 37 mm naval gun, two 14.5 mm twin-barrelled machine guns, in August 2011 as a replacement for the Lieutenant Dimo Hamaambo which was de-commissioned from service the same month.
Lt Gen Shalli was suspended from his position as NDF chief in July 2009 by President Hipikefunye Pohamba for “serious allegations of irregularities which must be thoroughly investigated within the letter and spirit of the laws of our Republic”.
He was then arrested on allegations that Poly Technologies paid up to US$500 000 into his Zambian bank account as commission for using his position to influence tender adjudication hearings in a manner which resulted in the Chinese company winning the defence procurement tender ahead of other bidders.
Prosecutor-General Martha Imalwa charge that as chief of the NDF, Shalli knew that he was not allowed to receive any money from Poly Tech, either as rental income or as a commission so as to avoid a conflict of interests.
She also accused the former army chief of attempting to disguise the source of the money by ordering Poly Technologies to deposit it in his Zambian rather than Namibian bank account. It is also alleged that Shalli used two former diplomatic colleagues, then based in Zambia, to transfer the money to Namibia and in the process committed tax fraud by failing to declare additional earnings for taxation purposes.
In his responding affidavits, Shalli denied all the charges but admitted that the Chinese company had indeed made payments into the two Zambian accounts. However, he insisted that the payments, one of which was defined as ‘commission’ and partly reflected the reference number of the contract signed between Namibia and the Chinese company on transaction records, were for rental income from Poly Technologies, which he said has signed a ten-year agreement to lease one of his houses in Walvis Bay, starting in March 2008.
However the court dismissed his appeal and has since written an ‘international letter of request’ to be sent to the Zambian Attorney-General for help in formal proceedings to repatriate the money to Namibia where it will be deposited into the Criminal Assets Recovery Fund. In response, Shalli said he is not going to appeal against the High Court order.
The Namibian arms tender scandal is not the first in Africa to embroil Poly Technologies. “Poly Tech (Inc) has been on Amnesty [International]’s radar for a long time because of their arms shipments to conflict zones, especially Africa. There’s been an effort to shine a spotlight on Poly’s failure to apply any kind of international human rights standards to their exports of weapons,” according to Amnesty International.
“Skepticism about the Chinese to regulate their own arms trade is well founded when you have a company like Poly that is so diversified and has such strong connections, or ‘guangxi,’ with the Chinese leadership,” stated Frank Jannuzi, the head of rights group Amnesty International in Washington DC.