ESCROW MONSTER RESURFACES

Businessmen James Rugemalira and Harbinger Singh Sethi (second and third left respectively) in a police vehicle at Kisutu Resident Magistrate's court compound in Dar es Salaam on Monday. They are facing charges related to economic sabotage and occasioning huge financial loss to the government. 

• Businessmen Rugemalira and Singh Sethi appear in court, facing six counts, including economic sabotage

Arraignment of the two alleged key players in the infamous 306bn/- Tegeta escrow account scandal at the Kisutu Resident Court on Monday, resonates with eight of the resolutions reached by the National Assembly way back November 2014.

The two, the Director of VIP Engineering and Marketing Mr James Rugemalira and Mr Harbinder Singh Sethi of Pan Africa Power Solutions Tanzania Limited (PAP), appeared at the court on Monday facing six counts of economic sabotage and occasioning a loss to the government of US $ 22.1 million dollars and 309bn/-.

State Attorney Paul Kadushi read the charges against them after which they were remanded since the lower court has no jurisdiction to prosecute such charges unless they get an approval from the Director of Public Prosecutions.

Resident Magistrate Huruma Shaidi explained further that economic sabotage crimes can only be heard at the High Court but that the DPP can in some instances issue an approval for the lower court to hear the charges.

The State Attorney informed the court that between October 18, 2011 and March 19, 2014, in Dar es Salaam, the duo conspired to commit offences in South Africa, Kenya, India and elsewhere.

During a session of parliament in November 2014, the august House had made eight resolutions one of which was for investigations and arrest of all people who were involved in the scandal.

The resolution followed a report by a special committee of the Parliamentary Public Accounts Committee (PAC) which was formed to probe the affair.

The court heard that between November 28 and 29, 2011 and on January 23, 2014 at the Stanbic Bank headquarters at Kinondoni and Mkombozi Bank, St Joseph Branch, the two businesspersons, through deceit, received the said amount from the Bank of Tanzania (BoT).

Before the arraignment of the duo, the Director General of Prevention and Combating of Corruption Bureau (PCCB), Mr Valentino Mlowola, told a news conference that the agency had all along been investigating the scam which rocked the country in 2014.

“The two will initially be brought before the Kisutu court before some judicial arrangements are made to transfer the case to the Corruption and Economic Crimes Division of the High Court,” Mr Mlowola explained to journalists.

The scandal involved the transfer of 309bn/- from an escrow account at the Bank of Tanzania (BoT), where it was jointly opened by Tanzania Electric Supply Company (TANESCO) and IPTL pending legal wrangles over capacity charges between the parties before domestic and international courts. IPTL, which operates dieselfired turbines at Tegeta in Dar es Salaam, was initially founded through a joint venture between a Malaysia company, Mechmar (70 per cent) and Mr Rugemalira’s VIP Engineering and Marketing Limited (30 per cent).

It is still unclear how Mechmar sold off its shares to another company, PiperLink of British Virgin Island, which later allegedly sold its stake to Mr Sethi’s PAP.

Billions of shillings were then paid to Mr Sethi from the account after he convinced officials that he had acquired a 70 per cent stake in IPTL. He then proceeded to acquire the 30 per cent stake which was owned by VIP Engineering and Marketing.

To seal a deal with Mr Rugemalira’s company, it is said that Mr Sethi had to pay a whopping US $75 million dollars (about 165bn/-) to acquire the 30 per cent.

As the scandal ravaged on with calls for actions from the parliament and subsequent investigations by PCCB and audits by the Controller and Auditor General (CAG), several top government officials were sacked while others resigned.

Among those who resigned were the then Minister for Energy and Minerals, Prof Sospeter Muhongo and Attorney General Fredrick Werema, while Prof Anna Tibaijuka, then Minister for Lands, Housing and Human Settlements Development, was fired by former President Jakaya Kikwete.

The former UN Habitat boss was fired after it emerged that she had been paid 1.6bn/- by Mr Rugemalira. The funds were suspected to be part of monies from the escrow account.

The list of other individuals said to have pocketed some of the funds include former Minister for Energy and Minerals William Ngeleja and former Attorney General Andrew Chenge. President Kikwete also dropped the then Permanent Secretary in the Ministry of Energy and Minerals, Mr Eliakim Maswi.

Daily News