President John Magufuli’s administration has sought Kenya’s help to get former Stanbic Bank Tanzania managing director Bashir Awale to record a witness statement outlining his alleged involvement in the scam.
Three Tanzanians are facing charges in a Dar es Salaam court over alleged kickbacks emanating from a $600 million (1.34 trillion/-) sovereign bond raised in 2013.
They are former Tanzania Revenue Authority (TRA) commissioner general Harry Kitilya and former bank managers Shose Sinare and Solomoni Sunari, who are accused of organising the money as an inducement to have state officials favour two banks when Tanzania floated an international bond in 2012.
The charges they face include money laundering, forgery, abuse of position, corruption, obtaining advantage and transfer of proceeds.
Awale was arrested in December 2015 and deported over claims of illegal stay in Tanzania. He was said to have been among the presidential campaign team members of former prime minister Edward Lowassa, who lost to Magufuli.
Tanzanian attorney general George Masaju wrote to his Kenyan counterpart Githu Muigai under a Mutual Legal Assistance (MLA), asking to have Awale provide evidence two years after he was deported.
“In order for the information and evidence requested to be admissible in the courts of Tanzania, it’s requested that any written statement or deposition be signed at the conclusion of each page and after the last word,” the MLA dated August 15, 2016 reads in part.
According to a brief accompanying the MLA, the Tanzanian government needed to raise funds for infrastructural requirements with Standard Bank with Stanbic getting a mandate to raise the funds.
During negotiations, the two banks quoted a combined fee of 1.4 per cent of gross proceeds raised. In September 2012, Stanbic proposed the fee be raised to increase to 2.4 per cent, with the extra 1 per cent being paid to a ‘local partner’, a Tanzanian company called Enterprise Growth Market Advisors (EGMA).
The chairman and one of the directors of EGMA was Kitilya, then TRA commissioner general, while the managing director of EGMA was Dr Fratten Mboya, who was CEO of the Capital Markets and Securities Authority (CMSA) between 1995 and 2011, and is now deceased.
The room for conflict of interest was evident but Stanbic never addressed the issue.
“It also appears that the CEO Bashir Awale and Shose Sinare (now charged in court) intended the 1 per cent fee promised to EGMA to induce the first suspect Harry Kitilya and other members of the government to show favour to Stanbic and Standard Bank’s proposal. EGMA opened a bank account with Stanbic to facilitate its activities in September 2012.”
EACC chief executive officer Halakhe Waqo said: “We have received the MLA and are working closely with the state law office in line with the request. A team of investigators from Tanzania and Kenya has been put in place to implement the request.”
The EACC boss, however, didn’t give details on the timelines of their work and if they had summoned the suspect.
“It takes time. For now, we cannot give you any timelines but I can assure you it will be done soon,” he said.
The Prevention and Combating Corruption Bureau (PCCB) has said it is seeking evidential materials that will assist in investigations and securing convictions.
Bashir was Stanbic Tanzania chief for seven years and was reportedly fired on August 19, 2013 for failing to co-operate in investigations. The bank later announced that he had left voluntarily.
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