RCMP investigate Canadian oil company ReconAfrica after complaints of alleged corruption and fraud


According to Canadians interviewed by the RCMP, the investigation appears to focus on two issues: ReconAfrica’s ties to politically connected figures in Namibia and the company’s stock promotion activities.John Grobler/The Globe and Mail

RCMP have launched an investigation into a Canadian oil company drilling exploration wells near the environmentally sensitive Okavango River in southern Africa, The Globe and Mail has learned.

RCMP investigators, in the early stages of an investigation that has followed multiple complaints from environmentalists, have interviewed at least two Canadians who have criticized the activities of Reconnaissance Energy Africa Ltd. RECO-X (ReconAfrica), a Calgary-based company with a drilling program in Namibia.

In an email to one of these witnesses, an RCMP officer said that the investigation related to alleged offenses under a Canadian law prohibiting the bribery of foreign public officials, as well as possible securities fraud. Police have made no formal allegations of wrongdoing against ReconAfrica, and the investigation may conclude that no charges are warranted.

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According to Canadians interviewed by the RCMP, the investigation appears to focus on two issues: ReconAfrica’s ties to politically connected figures in Namibia and the company’s stock promotion activities, including its public statements about the site’s geology. of exploration.

In response to questions from The Globe, the company said it was unaware of the investigation. The RCMP told the Globe they could neither confirm nor deny the existence of the investigation.

ReconAfrica has been shrouded in controversy since it first announced in 2020 that it would start exploring for oil in Namibia, near elephant migration routes and a river that flows into the famous delta of the Okavango, a UNESCO World Heritage Site that attracts thousands of tourists each year.

The dispute has become a global issue, with celebrities such as Prince Harry and Hollywood star Leonardo DiCaprio speaking out against the oil project. ReconAfrica’s exploration licenses cover a vast area of ​​approximately 35,000 square kilometers in northeastern Namibia and northwestern Botswana, adjacent to two national parks. The company says it is “committed to minimal habitat disruption” and will follow best environmental practices in all areas.

In recent statements, he said his drilling had found “good oil and gas shows” but did not say whether hydrocarbon extraction would be economically feasible. It reported a loss of $10.6 million in the first quarter of this year.

The Globe reported last year that ReconAfrica’s share price rose from around 50 cents to over $12 on the TSX Venture Exchange in 18 months after an aggressive promotional campaign, including a series of speculative articles in online media, some of which were paid for. for by society. The stock now trades below $5.

Complaints filed with securities regulators in the United States and British Columbia alleged that the company engaged in deceptive stock promotion and improper disclosures. The company has denied the allegations and says it operates in full compliance with all laws and regulations.

The Globe also reported last year that in 2020 ReconAfrica briefly hired a Namibian businessman, Knowledge Katti, who was widely reported in the Namibian media for his close ties to senior Namibian officials. , including President Hage Geingob. He reportedly traveled abroad with Mr. Geingob and even paid some of his medical bills. The company says it no longer has a business relationship with Mr. Katti.

ReconAfrica has faced persistent opposition to its exploration project in Namibia over the past two years. More recently, community forestry and conservation groups petitioned Namibia’s High Court to suspend the company’s exploration activities, pending an appeal against the latest environmental approval for drilling. The company opposes the request and the court is expected to issue a decision on August 3.

In another recent development, a Namibian parliamentary committee reported that ReconAfrica had failed to secure the necessary water and land use permits in the first phase of its drilling. The company “should have been sanctioned in accordance with the provisions of the law,” the report said. The company responded to questions about the report by saying it has now obtained all necessary water and land use permits.

Two RCMP investigators traveled to Nova Scotia in May to question the two Canadians – an environmental activist and a geologist – who had raised questions about ReconAfrica’s geological claims and drilling activities in Namibia. Investigators work for the Sensitive and International Investigations Section of the RCMP National Division.

In emails seen by The Globe, one of the investigators, Corporal Karla Kincade, said the RCMP became involved after Global Affairs Canada sent a dossier on the oil company to the force.

“They passed the case on to us last year after receiving your letter and after being alerted to all the social media and investigative reporting on the company,” she wrote in early May to one Canadian witnesses, Rob Parker, an activist with the Economic and Social Justice Trust of Namibia.

Global Affairs Canada spokeswoman Sabrine Barakat, in response to questions from The Globe, did not confirm the department’s role in the case. She said the department “does not comment on RCMP cases or accept criminal complaints for referral to the RCMP.”

In a separate email to M. Parker, Corp. Kincade cited the federal Corruption of Foreign Public Officials Act (CFPOA), which prohibits Canadian companies from bribing public officials of foreign governments in exchange for contracts or other decisions that benefit their companies.

“We are investigating alleged offenses contrary to the CFPOA (bribery of foreign public officials) by a Canadian company and/or employees or representatives of that company, and possibly also securities fraud,” he said. – she writes on May 2.

The RCMP’s National Division Media Relations Office, in response to questions from The Globe, said: ‘The RCMP neither confirms nor denies the existence of a criminal investigation unless charges are laid. No further comments will be made at this time. »

ReconAfrica, in response to questions from The Globe, said it was “not aware of the alleged RCMP investigation, ongoing or not”.

Mr Parker said investigators made an appointment with him at an RCMP station near his home in Nova Scotia on May 18 and spoke to him for more than four hours about the allegations about foreign officials and the rules on securities. “They told me at first what they were interested in, and they basically put a voice recorder on the table and said, ‘Talk,'” he told The Globe.

“I’m really happy with it. The RCMP has the capacity, the time, the power and the resources to get answers we just can’t get. It’s a serious organization, and they have the teeth and the power to conduct a proper investigation, which we’ve been asking for for a long time.

Elisabeth Kosters, an independent geologist and former university and government scientist who published a detailed critique of ReconAfrica’s claims about the geology of the exploration site, said RCMP investigators questioned her for more than an hour during a a recorded conversation at an RCMP station near her. home in Nova Scotia in May.

“They were trying to get a sense of me to find out if I’m really factual and if it’s real,” she told the Globe.

“They had an impression of my article and they had taken notes and asked questions. They really tried to understand, as much as they could, the geological underpinnings of this investment.

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