By Shinovene Immanuel | 2 February 2017
CHINESE millionaire Jack Huang, President Hage Geingob’s business partner and friend, was arrested yesterday in connection with the N$3,5 billion tax evasion, fraud and money laundering case unfolding in the courts.
His arrest comes after months of police investigations targeting a string of companies owned primarily by Chinese business people.
The Namibian has seen a list with Huang and his wife among the 24 people authorities consider to be “wanted persons” regarding the multibillion-dollar tax dodging case.
Huang’s wife, Li Dan, is said to be out of the country. Huang was allegedly arrested at the Hosea Kutako International Airport on his way to Angola where he also owns businesses.
The Namibian reported in December that Huang was under investigation for financial crimes, mainly because of his connection to at least one of the companies named in the N$3,5 billion tax scandal.
Huang, who is Geingob’s self-declared friend and business partner in a real estate company, has repeatedly denied being investigated by the police for financial irregularities.
In December, his representatives warned The Namibian against naming him as one of the people being investigated, claiming that he was being falsely linked to the case.
Huang’s lawyer, Sisa Namandje, told The Namibian yesterday that his client was “unlawfully” arrested, and that they are going to court to urgently challenge the police move.
“I will not even call it an arrest. They grabbed my client unlawfully, and we are going to challenge it immediately,” he said.
The lawyer branded the arrest as being unprocedural. An agitated Namandje said he was not aware that his client was branded a wanted man.
“We are not aware of any list. My client did not commit any offence in Namibia. If there is a list like you are saying, then we are going to fight it aggressively,” he charged.
A police document titled “wanted persons” shows that Huang and his wife, Li Dan, are number two and three on a list in connection with the N$3,5 billion money laundering, tax evasion and fraud case.
Police sources yesterday said the list was an internal memo for police officers working on the case.
Inspector General Sebastian Ndeitunga confirmed the existence of a list of wanted people regarding the tax fraud case, but declined to confirm or deny that Huang was on that list.
“Investigations are continuing,” he said.
The Namibian received complaints in December already, claiming that Huang was being handled with “kid gloves” because he was a friend of Ndeitunga. At the time, Ndeitunga denied the allegations that he was being soft on Huang.
“There will be no mercy. We will leave no stone unturned,” he said yesterday, although he emphasised that the people on the wanted list are considered innocent until proven guilty.
Ndeitunga and Huang’s relationship has come under close scrutiny. At the end of last year, the two met a few days before the police began raiding some of the businesses suspected of financial crimes.
Sources in the police questioned why Ndeitunga was meeting privately with Huang when he was a suspect in major crimes.
The police boss said last year that his relationship with Huang “is a professional relationship without attachments. It is not based on benefits”.
The company which linked Huang to the N$3,5 billion tax fraud case is Golden Phoenix, a firm that he owned with his wife and other Chinese nationals.
Huang claimed in 2016 that he had resigned from the company 10 years ago, but records at the ministry of trade were not changed until the report by The Namibian. Golden Phoenix was believed to be a key client of Extreme Customs Clearing Services (XCCS), the Namibian company now said to be the key link in the tax evasion allegations, and whose owner Laurentius Julius is accused of underdeclaring the value of goods imported into Namibia.
The investigation into the case began in February last year when the Bank of Namibia started sniffing around how Chinese companies were paying for importing goods into the country.
The bank found that there were large discrepancies in invoices used by Chinese-owned businesses, mostly based at Oshikango on the border with Angola, for the payment of customs duties on goods imported into Namibia, and those for payments to the suppliers of the imported goods based in China.
The Namibian reported last month that Roy Waligora, a director of the auditing firm KPMG in South Africa, told magistrate Alweendo Venatius that from 2013 to 2016, around N$3,5 billion was sent to foreign banks through foreign currency accounts of two Walvis Bay-based companies, Extreme Customs Clearing Services, and Organised Freight Services.
Those payments were made for goods supposedly imported into Namibia at a cost of US$313 million.
However, the total value for the imported goods reflected on invoices submitted to the customs authorities was only about US$15 million (around N$200 million), Waligora said.
He added that the difference between the value of the imported goods and the payments made to the foreign suppliers of the goods could be an indication that the customs process had been abused through the underdeclaration of the value of goods imported into Namibia, or for money laundering, or that payments made to exporters in China had been inflated in order to send foreign currency out of Namibia without having to comply with the country’s foreign exchange regulations.
Huang’s assistant, Felix, did not respond to detailed questions sent to them yesterday, saying they are still on holiday.
Huang is a jack of all trades, and has been philanthropic with his scholarships for medical students sent to China. He has also donated money to the ruling Swapo in the past.
He owns Sun Group International, a company which has invested in and constructed commercial buildings such as Freedom Square, Dragon City, China Town and Sun Square Hotel at Oshikango, and the Ondangwa Sun Square Mall.
Huang has links to the country’s top office through private dealings with the President and other senior government officials.
Huang and Geingob co-own African Sunrise Investment, a real estate company that aims to build a township east of Windhoek. That company is not linked to the N$3,5 billion tax fraud case.
Huang called himself a friend of Geingob when he built and handed over a house to a family in Katutura, whom the President had promised to assist after they lost their previous house due to non-payments for municipal services.