ARINSA News

Ex-Tanzania Revenue Authority boss, 2 others arraigned

FAUSTINE KAPAMA 02 April 2016

FORMER Commissioner General of Tanzania Revenue Authority (TRA) Harry Kitilya waves as he heads to board a prison vehicle on his way to Keko remand prison after being charged with money laundering at the Kisutu Resident magistrates Court in Dar es Salaam. Behind him are co-accused Sioi Solomon and Shose Sinare (Photo by Robert Okanda)

THE 600 million US dollar bribery scandal involving London-based ICBC Standard Bank yesterday took a new turn following the arraignment of three Tanzanians, including former Commissioner General of the Tanzania Revenue Authority (TRA), Harry Kitilya.

 

The accused are facing several counts, including money laundering. Other accused persons are former Miss Tanzania and head of investment banking at Stanbic Bank Shose Sinare and Sioi Graham Solomon, the former Chief Legal Counsel to the bank.

Other charges include forgery, uttering false documents and obtaining six million US dollars (about 12bn/-) by false pretence. Before Senior Resident Magistrate Emilius Mchauru, the trio denied the charges. They were remanded until April 8, when the court is set to deliver a ruling on an application for bail.

The defence team, led by Dr Ringo Tenga and Mr Semu Anney had requested the court to grant bail to their clients. However, the prosecution comprising Principal State Attorney Oswald Tibabyekomya, Senior State Attorney Christopher Msigwa and Stanley Luwoga from the Prevention and Combating of Corruption Bureau (PCCB) remained opposed to the request as the case involving money laundering was unbailable.

The prosecution told the court that on diverse dates between August 2012 and March 2013, within the city of Dar es Salaam, the three accused persons conspired together and other people who are not in court to commit an offence of obtaining money by false pretence from the government.

On August 2, 2012 at Stanbic Bank Tanzania Limited headquarters in Kinondoni District in the city, with intent to deceit, Sinare made a false Standard Bank's financing proposal dated August 2, 2012. She purportedly showed that Standard Bank London in collaboration with Stanbic Bank Tanzania would raise a loan amounting to 550 million US dollars for the government of the United Republic of Tanzania at a facilitation fee of 2.4 per cent of the principal amount, the fact she knew to be false.

The court heard that on August 13, 2012, the former Miss Tanzania allegedly fraudulently uttered the false document at the ministry of finance within Ilala District in the city. It is alleged further that on September 20, 2012, at Stanbic Bank, Sinare made a false mandate letter for proposed offering of 550 million US dollars financing, purporting that Standard Bank PLC in collaboration with Stanbic Bank would raise the money for the government if engaged as a lead manager.

The prosecution alleged that the same accused person uttered the said letter at the office of the ministry of finance for similar purposes. On November 5, 2012, at Stanbic Bank in thecity, all the three accused persons, with intent to deceit, allegedly made a false collaboration agreement purporting to show that the bank has established a consortium to collaborate with Enterprise Growth Market Advisors (EGMA) Limited.

The purpose, according to the prosecution, was to arrange for financing in the amount of 550 million US dollars to the government of Tanzania under which EGMA would arrange for negotiation and meeting involving the financing to facilitate understanding on the technicalities of the financing to the government.

It is claimed further that the EGMA was also to arrange for review finance documents and facilitate the provision of relevant documents or approval that would be required by relevant Tanzania authorities, the fact which the accused persons knew to be false.

According to the prosecution, in March 2013 in the city, Kitilya, Sinare and Solomon, with intent to defraud, jointly and together obtained from the government six million US dollars (about 12bn/-) by falsely pretending that the money was a facilitation fee payable to EGMA Limited. Such amount, it is alleged, was to facilitate together with Stanbic Bank Tanzania a loan to the government of the United Republic of Tanzania in the amount of 600 million US dollars.

The prosecution further charged the three accused persons with money laundering, an offence allegedly committed between March 13 and September, last year, within the city of Dar es Salaam. They are alleged to have directly engaged themselves in a transaction involving six million US dollars by transferring, withdrawing and depositing money relating to that transaction in different bank accounts maintained by EGMA Limited at Stanbic Bank Tanzania Limited and KCB Bank Limited.

The prosecution told the court further that the accused persons ought to have known that the said money was the proceeds of a predicate offence, which is forgery. It was reported recently that the London-based ICBC Standard Bank paid 33 million US dollars after admitting it failed to prevent bribery by two bankers at a sister firm in Tanzania.

Media reports from UK say the deal, sanctioned by a High Court judge, was the first time the SFO had used its powers to strike a deferred prosecution agreement (DPA).

The UK court heard two officials at Stanbic Bank in Tanzania, which is a subsidiary of the London bank, paid $6m to a third-party in Tanzania to help secure a deal for the bank to raise the 600 million US dollars for the Tanzanian government. It later emerged that six million US dollars was paid to Enterprise Growth Market Advisors, a company linked to two senior government officials.

Impediments in fighting corruption revealed

By Byron Mutingwende | NewsDay

VARIOUS impediments still stand in the way of efforts to address rampant corruption eating into the core of the social, political and economic fabric of the Zimbabwean society, stakeholders have said.

Stakeholders attendeding a national anti-corruption policy dialogue organised by Transparency International Zimbabwe in Harare on Thursday, said the United Nations Convention against Corruption -- which the country signed in 2004 before ratifying in 2007 -- was being violated.

Chief law officer in the National Prosecuting Authority (NPA), Chris Mutangadura, said the seriousness of the State in combating corruption was reflected in the National Budget.

"The NPA received just over $200 000 from Treasury in the 2016 National Budget. Corruption is a big issue perpetrated by people with money and political power,” he said.

"Look at people who are funding soccer for example. Prosecutors and magistrates are lawyers, but they get pathetic salaries. They have to do the national duty of investigating corruption issues like the Salarygate and Asiagate scandals, which require financial resources to be done thoroughly and comprehensively.”

Mutangadura was of the view that the Zimbabwe Anti-Corruption Commission (Zacc) be given powers to investigate and arrest perpetrators of corruption through legislative reforms.

"There is need to set up a Special Economic Crimes Court, such as in Kenya and Namibia,” he said.

One of the participants said the political leadership should set the tone for zero tolerance of corruption, as exemplified by Chinese President Xi Jinping, who has a tough stance against graft, even among the elite.

Prominent lawyer, Theresa Mugadza, called on all relevant stakeholders to emulate a strategy adopted on HIV and Aids to fight corruption.

She said the effects of corruption were worse than those of the pandemic because where the vice thrived, the nation would not have the capacity to feed its people and deal with drought and there were will be a shortage of essential drugs in clinics and hospitals.

"It's sad to note that people are fast to go to tabloids to report petty issues about sex and polygamy, instead of whistle-blowing on corruption,” Mugadza said.

She said it was folly to continuously talk about corruption without arresting perpetrators implicated after thorough investigations, adding there was need to set up a national target of dealing with corruption.

Michael Mataure, the Parliamentary Affairs and Parliamentary Support Trust executive director, said there was need to condemn corruption from an early age, even among primary school children.

"Fighting corruption should be a part of us and I am glad the Ministry of Education is rolling out a new curriculum that also emphasises on the sense of identity,” he said.

Chitungwiza North legislator and member of the Parliamentary Portfolio Committee on Finance and Economic Development, Godfrey Sithole, said there was need for the legislature and Zacc to work together in fighting corruption.

He urged the anti-corruption body to submit all reports on corruption to Parliament.

"Zacc should bring to Parliament all events on the ground pertaining to corruption. Zacc and police detectives on fraud should hold periodic meetings on how to deal with corruption so that we walk together with one purpose,” Sithole said.

Another participant said there was need to publicise the functions of the various anti-corruption institutions and encourage citizens to use the agencies that fight graft.

Mary-Jane Ncube, the executive director of TI-Z, hailed the establishment of a national code of corporate governance for the private sector, which has since been adopted by the government.

She called for the full implementation of the code.

"Zimbabwe should consolidate all corruption-related legislative matters in one law to create a comprehensive legal framework and examine ways to enhance coordination among the different institutions,” Ncube said.

The TI-Z boss called for the establishment of legislative and related measures that cover persons performing unpaid services or functions for the State or a public enterprise, bribery (active and passive) of foreign public officials and officials of public international organisations and a system of asset and income declarations applicable to high-level public officials.

She said Zimbabwe should consider corruption offences as serious enough to qualify as predicate crimes for money-laundering.

There was need to enhance the fines specified in the Criminal Law to deter legal persons from engaging in corruption, Ncube said.

The anti-corruption watchdog called for the adoption of provisions on criminalisation of foreign bribery and improvement of legislation on protection of witnesses, experts and victims and on liability of legal persons.

TI-Z said it was incumbent upon the country to consolidate existing legislation by adoption of stand-alone acts on laundering of proceeds of crime as well as on protection of whistle-blowers.

Corruption is currently endemic in Zimbabwe and little or nothing has been done to arrest perpetrators, amid recent revelations by President Robert Mugabe that $15 billion in diamond revenue was missing.

 

Read More: https://www.newsday.co.zw/2016/04/16/impediments-fighting-corruption-revealed/

ZAMBIA DEC Arrests 1339 for Drug Offences

 Lusaka Times

The Drug Enforcement Commission (DEC) arrested a total of 1,339 people countrywide for various drug offences in the first quarter of 2016.

The Commission stated that as at the end of March 2016, it arrested 1,339 people who include 1,224 males and 115 females for various drug related offences.

Of the total number of people arrested, 54 were juveniles and 25 were foreign nationals.

In a statement issued to ZANIS by the Commission's Public Relations Unit, Lusaka Province registered the highest number of arrests with 308 people followed by the Copperbelt Province with 184.

Luapula Province had 167 arrests, Southern Province 141, Central Province 125, and Eastern Province recorded 118. Muchinga Province recorded the least arrests with 44 people.

"Out of the 1,339 people arrested, 501 people have been convicted for drug offences. 836 cases of drug offences are pending before the courts of law, "read the statement in part.

The Commission also seized 20.04 tonnes of cannabis, 129.4kg of miraa, 24.24kg of cocaine, 30g of lignocaine and 24.82g of diazepam.
In addition,the DEC also recorded the largest single seizure of cocaine weighing 24.19 Kg beating the previous record of 13.12Kg seized from two Bolivians in 2012.

And the Commission's Anti-Money Laundering Investigations Unit arrested a total of ten (10) and convicted seven (07) people for money laundering offences.

The total amount involved from the arrests made amounts to K 855, 846.62 and US$44,204.46.
"The Commission also seized counterfeit bank notes amounting to ZMW35, 298.00 and US$52,001.00 in the first quarter of 2016, ' said the statement.

And the Commission through its Education and Counselling Department sensitised a total number of 80,714 people through the workplace, community and institutions of learning programmes.

Under the Counselling and Rehabilitation programme, the Commission attended to 126 clients of which six 6 were female and the remaining 120 male.

The age range of the clients was from 13 to 53 years with common drugs abused being cannabis, alcohol, tobacco, cocaine, and heroin.

Zimbabwe Service Partners with ICIJ on Panama Papers

By Ray Choto | April 05, 2016 3:30 PM

WASHINGTON--

Zimbabwe's leading platinum-mining firm, Zimplats Holdings, allegedly used an offshore company to pay salaries for senior managers in violation of exchange control laws, according to documents leaked from a Panamanian law firm.

The allegations are part of a wide-ranging investigation into the global use of offshore tax havens that has led to calls for "an urgent full investigation” by Zimplats majority shareholder, the South African firm Implats.

The so-called Panama Papers were first provided to the German newspaper Suddeutsche Zeitung which shared them with the International Consortium of Investigative Journalists. That group coordinated a comprehensive review with reporting partners from 76 nations, including VOA's Zimbabwe Service.

The documents from the Panamanian law firm Mossack Fonseca indicate that accountants Northern Wychwood used Mossack Fonseca to register a company named HR Consultancy in the Isle of Man to handle payments for senior managers of Zimplats Holdings limited.

"We receive the funds to cover the total salaries from Zimplats and pay the managers accordingly,” said a leaked correspondence dated November 5, 2012.

The documents claim that the senior managers to be paid by HR Consultancy are Zimbabwean citizens, but they do not list the names of the supposed recipients or the amounts allegedly paid.

Companies deny links

Zimplats denies any involvement with HR Consultancy or transactions outlined in the leaked documents.

"Zimbabwe Platinum Mines Private Limited has no relationship with the companies listed,” said Zimplats head of corporate affairs Busi Chindove.

Zimplats is 87 percent owned by the South African firm Implats. Spokesman Johan Theron says Implats has no knowledge of HR Consultancy.

"As far as I could establish, we have never conducted any business with such an entity,” he said.

Theron said Implats has "prioritized transparency in all our dealings and gone out of our way to transact fairly, openly and to transact and pay taxes in the countries in which we operate as far as possible.

He welcomed the Panama Papers disclosure and said Implats "will initiate an urgent full investigation into the purported Zimplats links with the Zimbabwe authorities.”

Documents reviewed by the VOA Zimbabwe Service program Studio7 show that Northern Wychwood continues to update HR Consultancy's certificate of incumbency, with the latest filing done through Mossack Fonseca last year.

Accounting practices would violate law

Zimbabwe Central Bank Governor John Mangudya said Zimplats' alleged behavior would not be in line with government policy.

FILE - Zimbabwean central bank governor John Mangudya delivers his 2016 Monetary Policy statement in Harare, Feb. 4, 2016.

"There is no company or firm in Zimbabwe that is authorized to operate offshore accounts for the purpose of paying its senior managers who are Zimbabweans and working in Zimbabwe. That practice bodes around externalization and thus typical case of illicit financial flows,” said Mangudya in a written statement.

"Zimbabwe is not aware of that practice which, if proven, is a blatant violation of the country's exchange control policy. Violation of exchange control rules and regulations is punishable offense,” explained the central bank chief.

The law firm documents identify the shareholder of HR Consultancy as Hanoverian Limited, based in the British Virgin Islands. Hanoverian Limited lists Palatinate Limited as its corporate director. In turn, Palatinate Limited's directors are Hanoverian Limited, Bryan Campion Ellis, Peter Whitney Fearnhead and Shaun Fergusson Cairns.

Asked whether Northern Wychwood provides consultancy to Palatinate, Hanoverian, and HR Consultancy, Northern Wychwood accountant Donna Summers told VOA, "We do not comment on matters pertaining to our clients.” Repeated calls for further comment from Summers went unanswered.

Mossack Fonseca corporate liaison officer Jordan Spencer also refused to comment on his company's relationship with HR Consultancy, Zimplats or Northern Wychwood, telling VOA, "We are not allowed to give any information about our clients to third parties.”

A source of funds or wealth declaration form signed by Palatinate in July last year says it is a director on Northern Wychwood Limited client companies. It lists Zimbabwe, South Africa, United Kingdom and Isle of Man as countries where its activities are conducted.

Named directors unavailable for comment

Efforts to get comment from Cairns, Ellis, and Fearnhead were fruitless at the time of publishing.

Fearnhead was a director at the now dissolved African Minerals Development Limited. Ellis is a Zimbabwean-born accountant who once worked for the British firm FIHZL. Cairns posted on an old students' social network that he worked for De Beers before setting up a trust fund in Isle of Man 1993. He lists an email address at Northern Wychwood.

Zimbabwe's former minister of finance Tendai Biti oversaw Central Bank operations between 2009 and 2013. Biti told VOA that if Zimplats set up an offshore company to pay salaries for its managers, then the managers at Zimplats also evaded paying taxes since they were being remunerated for work they did on Zimbabwean soil.

He says externalizing funds would violate several laws, including the Exchange Control Regulation of 1996, the Serious Offenses Act, and the Anti-Money Laundering Act.

Africa's $3 trillion loss

A recent Zimbabwe Central Bank report says the country lost $3 billion through illicit financial flows between 2009 and 2012, while Africa as a whole lost $3 trillion in illicit financial flows during the same period.

Central Bank Governor Mangudya told the media in December that Zimbabwe lost more than $500 million in illicit financial flows in 2015, money which he said should have benefited the country's struggling economy.

FILE - A worker drives a vehicle at Zimplats' Ngwarati Mine in Mhondoro-Ngezi May 30, 2014.

Leaked documents allege Zimplats used an offshore company to pay management salaries without the knowledge of the Reserve Bank of Zimbabwe.

The Panama Papers leak highlights the extent of shady offshore dealings that have robbed many countries of billions of dollars in taxes. In its report, ICIJ says major banks are the big drivers behind the creation of hard-to-trace shell companies in the British Virgins Islands, Panama and other offshore havens.

The ICIJ says the revelations in this unprecedented global investigation into more than 11 million secret files are the first to highlight the extent of secret business done by banks, law firms and other middlemen that hide extraordinary - and often illegal wealth.

Suddeutsche Zeitung reporting says tax authorities from several countries including Germany, Britain, Iceland and the United States have also acquired internal Mossack Fonseca data from a whistleblower. But the newspaper says that information is smaller and older than the documents just now released.

In February last year a cache of Mossack Fonseca documents obtained by German authorities led to a series of raids on German banks by investigators looking into possible money laundering and tax evasion.

Several banks, among them German's second largest bank Commerzbank, agreed to pay millions of euros in fines for helping customers evade taxes.
According to Suddeutsche Zeitung, German authorities are also considering legal action against Mossack Fonseca due to possible contribution to tax evasion.

The African Network of Centers for Investigative Reporting (ANCIR) contributed to this article.

Read More: http://www.voanews.com/content/voa-zimbabwe-service-partners-with-icij-on-panama-papers/3270632.html

Fidentia money was stashed overseas - Panama Papers

TMG Digital | 04 April, 2016 09:46



The Panama Papers - which purport to show how world leaders and companies hid funds away in banks and shadow companies - have uncovered how a law firm abroad was used to protect people involved in one of South Africa's biggest white collar fraud scandals.

The documents‚ held by the Panama-based law firm Mossack Fonseca‚ were shared with the International Consortium of Investigative Journalists who passed them to 107 media organisations in 78 countries.

Mossack Fonseca's leaked documents show that at least two of the men involved in the Fidentia fraud used the Panama-based law firm to create offshore companies.

Mossack Fonseca was willing to help one of the fraudsters protect his money even after authorities publicly linked him to the scandal‚ the consortium states - under a section titled‚ "Secrets and victims”.

An estimated R1.2-billion was misappropriated in the Fidentia scandal.

More than 60‚000 people‚ including widows and orphans of mineworkers who were beneficiaries of a Fidentia-controlled trust‚ were affected. Many were left bereft. Equally‚ the Transport Education and Training Authority lost the ability to fund its training programmes.

In December 2014‚ the former CEO of Fidentia‚ J Arthur Brown‚ was jailed by the Supreme Court of Appeal‚ which overturn the original sentence. A R150‚000 fine was replaced by two 15-year jail terms.

The appeal court's judgment stated that Brown "procured large amounts of capital from clients for investment by fraudulently representing that he would safeguard those amounts and obtain favourable returns‚ when‚ in fact‚ the money was thereafter invested recklessly or misappropriated for the benefit of Brown‚ his associates and/or corporate entities in which he held an interest.”

Brown had a lavish lifestyle‚ buying two racing cars‚ a game farm‚ tanzanite stones and a rugby team.

The International Consortium of Investigative Journalists report highlighted the impact of the nefarious crime.

 "Nick Kgopa's father died when Nick was 14. His father's workmates at a gold mine in northern South Africa said Nick's dad had been killed by chemical exposure.

"Nick and his mother and his younger brother‚ who is deaf‚ survived thanks to monthly checks from a fund for widows and orphans of mineworkers.

"One day the payments stopped.

"His family was one of many that lost out because of a $60 million investment fraud pulled off by South African businessmen. Prosecutors alleged that a group of individuals connected to an asset management company‚ Fidentia‚ had schemed to loot millions from investment funds -- including the mineworkers' death benefits pool that was supporting some 46‚000 widows and orphans.”

Mossack Fonseca's records on the Fidentia case show that one of the men later jailed in South Africa for his role in the fraud‚ Graham Maddock‚ paid Mossack Fonseca $59‚000 in 2005 and 2006 to create two sets of offshore companies‚ including one called Fidentia North America. The law firm's records say it gave him "the VIP service.”

Mossack Fonseca also created offshore structures for Steven Goodwin‚ a man that prosecutors later claimed had played an "instrumental role” within the Fidentia swindle. As the scandal broke in 2007‚ Goodwin flew to Australia‚ then to the U.S.‚ where a Mossack Fonseca lawyer met with him at a luxury hotel in Manhattan to discuss his offshore holdings‚ the firm's internal records show.

The firm official later wrote that he and Goodwin "spoke deeply” about the Fidentia scandal and that he had "convinced Goodwin to better protect” his offshore company's assets by passing them to a third party.

In his memo‚ the firm official told colleagues that Goodwin wasn't involved in the scandal "in any way whatsoever” -- he was just "a victim of the circumstances.”

In April 2008‚ the FBI arrested Goodwin in Los Angeles and sent him back to South Africa‚ where he pleaded guilty to fraud and money laundering. He was sentenced to 10 years in prison.

"A month after Goodwin's sentencing‚ an employee at Mossack Fonseca suggested a plan for frustrating South African prosecutors who were expected to start digging into assets linked to Goodwin's offshore company‚ Hamlyn Property LLP‚ which had been set up to buy real estate in South Africa‚” the consortium said.

"The employee proposed having an accountant 'prepare' audits for 2006 and 2007 'to try to prevent the prosecutor from taking actions against the entities behind Hamlyn'. He set off 'prepare' in quote marks in his email.”

It's unclear whether the proposal was adopted.

Mossack Fonseca did not answer questions from ICIJ about its relationship with Goodwin‚ the consortium said.

A representative for Goodwin told ICIJ that Goodwin "had nothing whatsoever” to do Fidentia's collapse "or anything directly or indirectly to do with the 46‚000 widows and orphans”.

Read More: http://www.timeslive.co.za/local/2016/04/04/Fidentia-money-was-stashed-overseas-%E2%80%93-Panama-Papers

http://www.standardmedia.co.ke/article/2000196635/uk-recovers-sh577-million-stolen-from-kenyan-taxpayers