Creative cross-ownership ensures Aquaship has full control of its Chilean wellboat companies

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This allows the Norwegian wellboat company to transport fish without giving up ownership control of its Chilean subsidiaries.

Under Chilean law, foreigners can’t control the ownership of shipping companies that carry freight along the coast of the country. However, this does not prevent Norwegian wellboat giants from exercising controlling ownership in several shipping companies in Chile.

Aquaship, which operates a fleet of a total of 28 vessels, has full control of its subsidiaries in Chile. This has led to protests from competing players.

Not fulfilled
The Chilean wellboat company Naviera Orca, 22 per-cent owned by Rostein owner Odd Einar Sandøy, engaged the Norwegian law firm Selmer to look into the ownership arrangement. Selmer believes the Aquaship Group (formerly known as Gripship) circumvents Chilean ownership legislation in this way.

“Christina,” sails for Aquaship in Chile. PHOTO: Aquaship

“Based on our review, Gripship Chile has not fulfilled the legal requirement in order to operate the vessels in Chile in accordance with the local ownership requirement, as the shares of Gripship Chile was directly or indirectly 74% or 100% owned by the Norwegian entity, Gripship AS,in the whole period. The legal requirement of a majority ownership was thus not fulfilled for all years under our examination, 2012–2017,” wrote Selmer.

Significant profits
A KPMG report confirmed that “Gripship Chile was directly or indirectly 74% or 100% owned by Gripship Service for the whole period 2012 –2017, in accordance with audited official company accounts of Gripship Service”.

“Our analyses further show that Gripship Service has obtained substantial profit from the operations carried out in Gripship Chile. Based on audited and official Norwegian financial statements, the total profit after tax was MNOK 40.5 (EUR 3.6 million .ed)) in the period 2012–2017,” it said.

Based on Selmer’s review of the audited accounts of the Gripship Service, it wrote that: “Gripship Chile has been 100 per-cent owned by Gripship Service between 2012 and 2015. “In 2016, Inversiones Austral SpA bought 51 per-cent of the shares in Gripship Chile from Gripship Service. Thus, Gripship Service’s shareholding was reduced to 49 per-cent in 2016. However, Gripship AS owns 49% of the shares in Inversiones Austral SpA. Thus, Gripship AS owns Gripship Chile 24 per-cent indirectly and has a total stake of74% in Gripship Chile.TheGripshipgrouphas an option to buy shares in Inversiones Austral SpA which increase the group’s voting share/ownership share and gives the group control of Gripship Chile.”

According to Selmer, Aquaship has also secured ownership in other ways:

“The Gripship Group has an option to buy shares in Inversiones Austral SpA which increase the group’s voting share/ownership share and gives the group control of Gripship Chile. GripshipChile SA, Santiagochanged name to Gripship SpA, Puerto Montt, Chile in 2016.”

Sole business
Aquaship’s annual report for 2019 elaborated on how activity and cross-ownership in Chile are organized.

Aquaship CEO Sverre Taknes. PHOTO: Aquaship

“The subsidiary GripShip AS owns 49 per-cent of the shares in Naviera Beagle SpA, Naviera Kaweskar SpA, and Inversiones Austral SpA located in Purto Montt, Chile. Naviera Beagle SpA and Naviera Keweskar SpA operate wellboat operations. The sole business in Inversione’s Austral SpA is to own 51 per-cent of the shares in GripShip SpA, Puerto Montt, which operates wellboat operations in Chile. The remaining 49 per-cent of the shares in GripShip SpA are owned by GripShip Service AS which is 100 per-cent owned by Grip Ship AS,” the notes stated in the annual report.

Aquaship CEO Sverre Taknes believes the company has done nothing wrong in Chile. He denies the allegations in the Selmer report.

“AquaShip AS meets the requirements of Chilean ownership legislation, which we have always followed and done. The sent reports are characterised by having been prepared based on available Norwegian information about the company and the comments appear to be partially incorrect/deficient in relation to our past and present ownership situation in Chile,” he wrote in an email to SalmonBusiness.

Ignored
Lawyer Álvaro Jana Linetzky, who represents the Chilean trade union Armasur, is among those who are engaged in the case.

“Chilean Navigation laws, as is the case with Norwegian laws and almost every country in the rest of the world, limit foreign ownership for vessel operating in coastal waters. Several Norwegian companies, namely Solvtrans and Gripship, has openly ignored these laws,” he emailed SalmonBusiness.

“Sølvtrans Chile and GripShip Chile some years ago (2012) registered their vessels as “speciality ships”, a category which only allowed for transport of their own fish, well aware that they did not have any fish in Chile. The reason was that more than 51 per-cent of the shares ownership formally belonged to the NWY holding companies Solvtrans AS and GripShip Services AS. The consequence was that DIRECTEMAR registered the vessels with the express prohibition for transport fish from third parties. In spite of the prohibition both companies engaged permanently in commercial contracts to transport living fish from salmon companies. In other words, they permanently infringed Chilean Navigation Laws and the executive prohibition over their commercial activities therefore illegally providing wellboat services and obviously competing with other duly authorized wellboat companies with artificial or arbitrary competitive advantages,” he added.

Taknes did not wish to comment on this statement.

Sølvtrans’s managing director Roger Halsebakk did not wish to comment on issues related to his own shipping company’s ownership and activity in Chile, as several court cases are ongoing in the country.