Taranaki iwi faces multi-million dollar shortfall in Korean fishing investment
By Paul McBeth
Sept 10 (BusinessDesk) - Taranaki iwi Ngati Tama faces a multi-million dollar shortfall from its investment in a Korean fishing vessel, whose Indonesian crew jumped ship last year amid claims of abuse and substandard pay conditions.
Liquidator Peter Coleman says the unsecured creditors of Tuere Fishing, which operated the Korean-flagged vessel FV Shin Ji, face a shortfall of some $3.4 million, according to his first report. The fishing company owes some $4.6 million to shareholder Ikatuna, the holding company used by Ngati Tama.
Tuere's most valuable asset is its Korean fishing licence, which provides import duty tariff concessions and reduced live fish quarantine requirements in the Asian nation.
The licence doesn't have a book value, but Coleman estimates he can realise $1 million from it as they are "highly sought after by Korean fishing entities," he said. That's more than half the $1.8 million realisable total he's put against Tuere's assets.
Earlier this year, Ngati Tama told its 5,000 members it had lost almost $20 million from a series of bad investments, wiping out its 2003 Treaty settlement of $14.5 million. The investment portfolio had been overseen by the seven-member Ngati Tama Development Trust, led by Greg White, who drove the settlement negotiations a decade ago. He has since resigned.
The Korean Shin Ji vessel attracted publicity after the crew walked off the boat, and was detained by Maritime New Zealand as part of its investigation into compliance with local law. The incident was one of several that prompted New Zealand's government to look at its requirements for foreign fishing vessels, and resulted in international boats needing to register under New Zealand law within four years.
Tuere appointed Coleman as a voluntary administrator in June last year after seven former crew alleged unpaid wages of $1.1 million, a claim which has since been settled. It was tipped into liquidation in February this year after director Hyun Choi put forward a two-year moratorium on repayments to Ikatuna, a deal the shareholder refused.
The Shin Ji vessel has since left New Zealand waters for Fiji after the detention was lifted.
Coleman said there have been "several apparent breaches of the various specific responsibilities required of the directors," including failing to act in good faith, particularly in relation to conflicts of interest on related party transactions, providing company records, and converting the company's assets.
"These offences are material to the liquidation of the company and in accordance with S258A of the Companies Act 1993; I am required to report this offending to the Register of Companies," Coleman said.
He stressed fellow Tuere director Greg White of Ngati Tama wasn't at fault.
"To mitigate the consequences and potential loss to Tuere Fishing Limited, an application has been made to the High Court in Fiji for a Warrant of Arrest against the fishing vessel - FV Shin Ji," he said. The hearing is scheduled for Sept. 26.
Coleman expects to proceed with further prosecution against Choi.