Stanbic Bank Tanzania has finally paid a fine of 3bn/- to the Bank of Tanzania (BoT) for its role in the dubious transaction in which six million US dollars (about 12bn/-) was withdrawn in cash in a matter of days by a local firm, Enterprise Growth Market Advisors (EGMA), in 2013.
“The bank submitted its defence in regard to the matter but we were not satisfied and they agreed to pay the fine as required,” the central bank’s Governor, Professor Benno Ndulu, told this newspaper in a telephone interview.
Prof Ndulu would not go into details but emphasized that the commercial bank had deposited the money at the central bank as it had been directed.
On January 17, this year, the Minister for Finance and Planning, Dr Philip Mpango, revealed at a news conference that Stanbic Bank Tanzania had been given until January 30, 2016, to defend itself against the penalty.
“The law requires the bank to file its defence in 20 days and if the central bank is not satisfied, then Stanbic Bank Tanzania will be compelled to pay the fine,” Dr Mpango explained then.
He noted on the other hand that the Prevention and Combating of Corruption Bureau (PCCB) is still conducting investigations on individuals implicated in the scandal.
EGMA directors allegedly received kickbacks amounting to 6 million US dollars (about 12bn/-) for ‘facilitating’ a Eurobond of US $600 million dollars (about 1.2 trillion/-) from the parent company of Stanbic Bank Tanzania, the Standard Bank UK, now called ICBC Standard Bank.
The arrangements for the bond were made by Bashir Awale, then Chief Executive of Stanbic Tanzania and Ms Shose Sinare, then the head of corporate and investment banking.
Awale was later sacked while Sinare resigned. “The penalty should serve as a warning to other banks and financial institutions, which will fail to adhere to the Banking and Financial Institutions Act of 2006 and its regulations,” the minister stressed.
Dr Mpango said the penalty was slapped on Stanbic after the central bank satisfied itself that the former failed to put in place proper internal control mechanisms that would have stopped the payments to EGMA.
Last December, Chief Secretary Ombeni Sefue said the government was conducting its own investigations to pin individuals behind the dubious payments in which billions of money were withdrawn in cash within few days, contrary to banking regulations.
Ambassador Sefue’s revelation came days after Standard Bank UK admitted before the High Court in London of wrongdoing by its Tanzanian branch and agreed to pay a fine to avoid more litigation.