Speaking to reporters in Dar es Salaam, Chief Secretary, Ombeni Sefue said the government knew that suspects including its officials pocketed some USD 6 million (approx. 12bn/- )illegally.
However, this statement comes hardly a day after a court ruling in UK exposed the matter which was widely reported by the Tanzania media yesterday.
According to the UK expose, Tanzania Revenue Authority (TRA) Commissioner General, Harry Kitilya (rtd) and former Capital Markets and Securities Authority (CMSA) Chief Executive officer, the late Dr Fratern Mboya were among government officials implicated in the Standard Bank Plc bribery.
Documentary evidence from UK’s Serious Fraud Office (SFO) indicates that Kitilya while still working at TRA as Commissioner General in 2012 and Dr Mboya through their Enterprise Growth Market Advisors (EGMA) were paid the money as external consultants.
The bribery led to the proposed fee to be paid by the government to increase by 1 per cent to 2.4 per cent compared to initial agreement reached prior to September 2012.
According to Sefue, apart from Kitilya and Mboya, another person who took part in the scheme is one Gasper Njuu whose details including residency and occupation were not known to the authorities.“Our investigation which is being conducted by PCCB, Bank of Tanzania and Financial Intelligence Unit is ongoing,” he said and added that even if the amount was received a consultancy fee, the recipients “did not pay withholding tax” which is also a violation of the laws.
Sefue explained that after the UK court ruling, Tanzania will be refunded a total of 15bn/- which is the illegally obtained 12bn/- plus interest accrued.
The SFO documents submitted to a British judge Brian Leveson who presided over an out-of-court settlement between Standard Bank Plc and the British investigating institution, indicate that EGMA was paid through Stanbic Bank Tanzania Limited, the SB Plc’s local subsidiary.
The evidence further noted that Standard Bank knew about the 1 per cent consultancy fee to be paid to the local partner after Stanbic Bank had already submitted its proposal on placing a US$ 600 million (approx. 1.29 trillion) bond at London Stock Exchange’s alternative market.
Kitilya who is identified as EGMA chairman at the time while Dr Mboya was managing director of the company which enjoyed cooperation from former Finance Ministers, Mustafa Mkullo and the late Dr William Mgimwa. The two EGMA officials were also cordial to the then Permanent Secretary Ramadhan Khijah.
“Stanbic Tanzania's regulator subsequently opined that this transaction was within Kitilya's jurisdiction and that he should have inhibited himself from taking part as external consultant,” the SFO court document stated.
The deal which started early 2012 almost collapsed until Kitilya and Mboya came aboard in November of the same year to offer their consultancy.
“Then in November 2012 about two months after an indication that a local partner would be engaged and paid the 1 per cent, the GOT (Government of Tanzania) formally granted Standard Bank and Stanbic Bank the mandate to raise the sum of US $550 million. By the time of the completion of the financing in March 2013, the amount to be raised for the GOT increased to US $600 million,” the report stated.
The former Stanbic Bank Chief Executive Officer, Bashir Awale and head of corporate and investment banking, Shose Senare, have also been implicated in the scandal which further raises enough eyebrows regarding Stanbic Bank Tanzania Limited’s involvement in high level graft in the country.
“Both Stanbic Tanzania Bank's CEO, Bashir Awale and Shose Senare intended this 1 per cent fee promised to EGMA to induce a senior representative or senior representatives of the GOT to perform a relevant function improperly, namely by that representative(s) showing favour to Standard Bank and Stanbic Tanzania in their bid to secure their joint role and fees on the financing transaction,” the SFO said.
Both Bank of Tanzania governor, Prof Benno Ndulu and permanent secretary at the Ministry of Finance, Dr Servacius Likwelile have denied any involvement in the deal.
“This was not a treasury bond but a private placement, follow the court proceedings and you will see those who were involved,” said prof Ndulu.
On his part, Dr Likwelile said no government penny has been lost through the case but instead a penalty of US$ 7 million (approx. 15.1bn/-) has been imposed on Standard Bank by the London court to compensate the Treasury.
“This is a private placement by a bank, we have so far lost money here but have rather been compensated,” argued Dr Likwelile. Efforts to get Kiltilya’s position on the subject failed yesterday until we went to press.
SOURCE: THE GUARDIAN
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