Kenyan wanted in Tanzania over Sh600m bond scam

NAIROBI: The Ethics and Anti-Corruption Commission (EACC) is assisting Tanzanian authorities to have a Kenyan at the centre of a Sh600 million ($6M) bribery scandal in Tanzania arrested and questioned.

President Joseph Magufuli’s administration has sought Kenya’s help to have Mr Bashir Awale, a former bank official, record a statement.

Three Tanzanians have already been charged in court over the kickbacks emanating from a sovereign bond raised in 2013, with the Kenyan being listed as one of the accused.

Tanzania’s Attorney General George Masaju wrote to his Kenyan counterpart Githu Muigai under a Mutual Legal Assistance (MLA), asking to have the man provide evidence two years after he was deported.

International bond

Awale is accused of organising the money as an inducement to have state officials favour two banks when Tanzania floated an international bond in 2012.

“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,” EACC CEO Halakhe Waqo said.

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.” Bashir was arrested in December 2015 and deported over claims of illegal stay. He was said to have been among the presidential campaign team members of former Prime Minister Edward Lowassa who lost to Magafuli. Dar es Salam petitioned Nairobi to have Bashir record a witness statement outlining his alleged involvement in the scam.

In documents seen by the Saturday Standard, Tanzania’s Prevention and Combating Corruption Bureau (PCCB) says its seeking evidential materials that will assist in investigations and securing convictions. He is accused alongside former Tanzania Revenue Authority commissioner Harry Kitilya, former bank managers Shose Sinare and Solomoni Sunari.

The three Tanzanians have already been charged with seven counts among them money laundering, forgery, abuse of position, corruption, obtaining advantage and transfer of proceeds and are in remand.

Bashir was Stanbic Tanzania chief for seven years and was fired on August 19, 2013 for failing to co-operate in investigations. The bank later announced that he had left voluntarily.

“In order for the information and evidence requested to be admissible in the courts of Tanzania, its 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, Tanzania government needed to raise funds for infrastructural requirements with Standard bank and 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 Harry Kitilya, then TRA commissioner, while the managing director of EGMA was Dr Fratten Mboya, who was CEO of Capital Markets and Securities Authority (CMSA) between 1995 to 2011, and 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.”