Wednesday, June 21, 2017

Tanzania: Independent Power Tanzania Limited 'Owners' Finally Charged
Photo: Ericky Boniphace/The Citizen

James Rugemalira and Harbinder Singh Sethi appear before the Kisutu Resident Magistrate’s Court in Dar es Salaam yesterday. They faced several charges in relation to their role in the Tegeta escrow account scandal.

Dar es Salaam — The key suspects in the infamous Tegeta escrow scandal, Mr Harbinder Singh Sethi and Mr James Rugemalira, yesterday appeared in court charged with occasioning a loss of more than Sh358 billion to the economy.

The two jointly faced six charges of economic sabotage, forgery, impersonation, running a criminal syndicate and obtaining money by false pretence and causing loss of money to the government.

They appeared before Kisutu Principal Resident Magistrate Huruma Shaidi but were not required to take plea as the court lacked jurisdiction to hear the case. The suspects were denied bail and will be remanded at Segerea prison until July 3 when the matter will come up again for mention.

It was the first time that the two, who were at the centre of one of Tanzania's monumental scandals in recent history, were appearing in court, almost three years after Parliament recommended their prosecution.

The Citizen learnt that Mr Sethi, who mostly lives in South Africa, was seized at Julius Nyerere International Airport as he and his wife were about to fly out.

Their arraignment will be seen as a bold move by the government to bring to justice suspects implicated in mega scandals. It will also likely boost President John Magufuli's scorecard on his pledge to combat corruption from the top.

It came hot on the heels of the recent decision by Prime Minister Kassim Majaliwa to suspend the director general of the Energy and Water Utilities Regulatory Authority (Ewura), Mr Felix Ngamlagosi, over the renewal of the IPTL licence. Ewura has since halted the process to grant the licence which would have enabled the power firm to continue executing its 20-year contract with Tanesco.

Prevention and Combating of Corruption Bureau (PCCB) director general Valentino Mlowola earlier addressed a press conference in his Dar es Salaam office to signal the start of the case.

"For a long time now, people have been curious to know the progress of our investigation on the Tegeta escrow and IPTL scandals. It is the PCCB's responsibility to combat corruption and economic sabotage in the country, and I can now say we are ready to take the suspects to court," he told Journalists.

The move also drew immediate reaction from leaders and trended for most of the day on social media platforms, with most commentators welcoming the charging of the suspects.

"I want to sincerely thank the government for charging the two businessmen over the escrow scandal as recommended by Parliament," said Mr Zitto Kabwe, the ACT-Wazalendo party leader and Kigoma Urban MP. Mr Kabwe chaired the Public Accounts Committee that investigated the Tegeta escrow scandal.

In a statement released last evening, Mr Kabwe said the case was a major step in the efforts to combat corruption in Tanzania. "I am only saddened that it has come after the 2015 death of Deo Filikunjombe who deputised me in the investigation," he said.

Mr Sethi and Mr Rugemalira were named in 2014 in Parliament as having overseen a plan which saw over Sh300 billion siphoned from an IPTL and Tanzania Electric Supply Company (Tanesco) joint account in the Bank of Tanzania (BoT). Part of the money, according to the investigations, was dished out to politicians, government officials, some judges and religious leaders, among others.

The investigation prompted the resignation of the then Attorney General, Fredrick Werema, Energy and Minerals minister Sospeter Muhongo while President Jakaya Kikwete fired the then Lands, Housing and Human Settlements Development minister, Prof Anna Tibaijuka, who was shown as having received Sh1.6 billion from the funds. Several other senior government officials in various ministries are facing charges over their role in facilitating the matter or receiving money from the escrow proceeds.

Yesterday, Mr Sethi and Mr Rugemalira were brought to the court at about 2.30pm under tight security. Mr Sethi kneeled down and Mr Rugemalira squatted before they were finally led to the dock.

They faced economic sabotage charges relating to causing the government a loss of $22, 198, 554 and Sh309, 461, 300, 158. State Counsels Faraja Nchimbi and Paul Kadushi led the prosecution.

They told the court that Mr Rugemalira who owned 30 per cent stake in IPTL and Sethi who is the executive chairman of Pan African Power Solution (PAP) committed the offence between October 18, 2011 and March 19, 2014.

The suspects reportedly hatched the plot in between trips to Kenya, South Africa, India and Tanzania to falsely swap shares and for PAP to acquire IPTL. They then were said to have colluded with government officials in running the illegal syndicate with an intention of profiteering from their collusion.

The prosecution accused Mr Sethi of forging a company registration certificate in October 2011 and lying that he was a Tanzanian resident living in Masaki area while knowing it was not true.

Both the accused were said to have illegally withdrawn $22,198,554.60 and Sh309.461 billion from the escrow central bank account. The offences were committed between November 28/29, 2011 and January 23, 2014 at the Stanbic Bank headquarters in Kinondoni.

The defence lawyer Respicius Dida applied for bail for his clients but the court turned down the request on the premise it did not have the powers to hear the case.

The defence also objected to the application, saying the court did not qualify to hear the matter and that investigations were also in progress.

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