Dar es Salaam, Saturday September 13, 2014 The government has frozen an account in a bank in the Netherlands that is linked with the $65 million that was controversially taken from an escrow account at the Bank of Tanzania and paid to a private entity last year.
The Citizen on Saturday has reliably learnt that a substantial amount of money was transferred from an account at the Catholic Church-owned Mkombozi Bank to the bank in the Netherlands. The Mkombozi account belongs to VIP Engineering and Marketing, the company that owned 30 per cent shares in Independent Power Tanzania Limited (IPTL) until it allegedly sold its shares to Pan African Power Solutions Tanzania Limited (PAP) for $65 million.
The controversial sale of IPTL to PAP has been heavily criticised from within and outside the country, prompting Parliament to ask the Controller and Auditor General (CAG) to investigate how the money was transferred from BoT’s escrow account to PAP. The Prevention and Combating of Corruption Bureau (PCCB) is also conducting a parallel investigation into the matter.
The Citizen on Saturday established that billions of shillings were transferred from VIP’s account to a bank in Holland. Tanzanian investigators managed to trace the account and worked with their counterparts overseas to freeze it pending further investigations.
PCCB Director-General Edward Hosea declined to comment on the development yesterday. “The law bars me from releasing information on investigations I conduct,” he said. “It is ethically and professionally unwise to comment on a matter under investigation at this point, so my answer is no comment.”
The Citizen on Saturday understands that PCCB called up all records of transactions from VIP’s account as it sought to establish the purpose of the transaction and transfers.
Besides discovering that huge sums of money had been transferred from the account to several others at the same bank, the investigators raised the red flag over the millions of dollars transferred from the bank to an overseas account.
Under international banking practice, an account may be frozen by government or regulatory authorities if they suspect criminal activity and civil action or liens filed against the account.
As the nation awaits the findings of the CAG and the PCCB, emerging reports have it that the investigations have established that some influential Tanzanians, including cabinet ministers, a permanent secretary and MPs were paid substantial amounts of money from VIP’s at Mkombozi.
An impeccable source told The Citizen on Saturday that the PCCB has established that taking the money from BoT was “outright theft” facilitated by corruption. Top officials in the BoT, the Attorney General’s Chambers and the energy ministry appear to have been implicated. “The CAG has concluded that the release of money from the escrow account was a grossly irregular move based on fraud,” said the source.
The CAG has recommended that all the officials be charged in court and the money taken from the escrow account returned.
Dr Hosea is also ready to prosecute those who received the Rugemalila money from Mkombozi.
The IPTL saga resurfaced in March this year after Prime Minister Mizengo Pinda ordered the CAG and PCCB to carry out a parallel investigation into the deal. The work of the two agencies centred on the release of the escrow money and the entire process that led to the takeover of IPTL by PAP.
BoT Governor Benno Ndulu recently announced having transferred the funds to the PAP account between November 28 and December 8, last year. The transfer raised eyebrows and Parliament’s Public Accounts Committee ordered the CAG’s office and the PCCB to establish the truth.
The probe is expected to unmask the questionable sale of IPTL to a new foreign owner and also open leads into how Sh201 billion ($122 million) in escrow funds were transferred to pay for the deal.
The Citizen on Saturday has exclusively reported how PAP came into play in the deal-making IPTL power supply story. PAC Chairperson Zitto Kabwe is on record saying that his committee was concerned that the deal could lead to Tanesco paying Sh200 billion to PAP, which reportedly bought IPTL at $65 million.
The CAG’s investigation sought to establish how the $122 million (Sh201 billion) was transferred from the BoT escrow account to PAP.
The Citizen on Saturday
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