Tanzania probes banks over escrow scandal

Senior officials are accused of fraudulent transfer of $122 million of public funds to a private company

Tanzania probes banks over escrow scandal
World Bulletin / News Desk
 
 The Tanzanian authorities are investigating banks linked to the fraudulent transfer of some $120 million of public funds to a private energy firm in a scandal known locally as the "Tegeta Escrow Account."

"My agency is carrying out investigations as directed by parliament in one of the eight resolutions on the escrow account and later by the president," Onesmo Makombe, commissioner of Tanzania's Financial Intelligence Unit, the state agency in charge of money laundering investigations, told The Anadolu Agency by phone.

Makombe said the investigation was not only looking into the roles played by banks, but also into individuals involved in the transactions.

Controversy gripped Tanzania for months after the Public Account Committee released a report accusing senior government officials of having fraudulently authorized the disbursement of at least $122 million of public funds from an escrow account to a private company.

It has since been shown that certain officials benefited from the escrow account money, receiving millions of dollars from James Rugemalila, a shareholder in the Independent Power Tanzania Limited company.

The National Assembly has asked President Jakaya Kikwete to sack four top government officials with ties to the scandal: Attorney-General Frederick Werema; Energy and Minerals Minister Sospeter Muhongo; Energy and Minerals Permanent Secretary Eliachim Maswi; and Minister of Land, Housing and Human Settlement Anna Tibaijuka.

Since then, Werema has voluntarily resigned, while Kikwete sacked Tibaijuka after confirming that over $1.2 million from Rugemalila had been deposited into her personal bank account.

Maswi, for his part, has been suspended from his post, while Muhongo's fate hangs on the outcome of an investigation that remains ongoing.

The Controller Auditor General's report cited an "unusual" withdrawal of cash from two banks.

"Stanbic Bank Tanzania and Mkombozi Commercial Bank should be thoroughly investigated to prove any violation of anti-money laundring rules by allowing the withdrawal of billions within a short period," Public Account Committee Chairman Zitto Kabwe said when presenting the committee's report to parliament.

Speaking from Dar es Salaam, Tanzania's business capital, Commissioner Makombe said the report would be ready in due course.

"I cannot tell you exactly when we are going to complete the job," he told AA. "The important thing I can prove is that we have embarked on the job."

President Kikwete has ordered relevant state agencies to investigate the escrow account scandal, along with all those involved.

Chairman Kabwe, for his part, urged the Financial Intelligence Unit not to leave any stone unturned in their investigations, because the public was awaiting a detailed report on the scandal.

"The Prevention and Combating of Corruption Bureau should also establish thorough investigations why Stanbic Bank allowed withdrawals totaling 73 billion Tanzanian shillings within a short period," he told AA.

National Bank of Tanzania Governor Benno Ndulu, for one, has promised that his office would provide the necessary assistance to the Financial Intelligence Unit throughout the course of its investigations.

"The anti-money laundering act gives the Financial Intelligence Unit the powers to investigate any institution, including banks," he told AA.

"The Bank of Tanzania will give the assistance and cooperation needed to support the investigation," Ndulu vowed.

 

Last Mod: 01 Ocak 2015, 14:04
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