The case relates to a $6 million bribe related to a private placing of sovereign notes to raise funds for the government of Tanzania, according to court documents.
Dar es Salaam. Another mega corruption scandal surfaced yesterday following revelations that government officials pocketed $6 million (over Sh12 billion) in bribes for a treasury bond deal with a UK bank.
Reports say the hefty bribe facilitated the purchase of $600 million (Sh1.3 trillion) treasury bonds in 2013 by the UK-based Standard Bank.
The damning revelation emerged when the bank pleaded guilty in a London court yesterday following a charge brought against it by the UK’s Serious Fraud Office (SFO).
According to a court ruling delivered in London yesterday, the former chief executive and the former head of corporate and investment banking at Standard Bank in Tanzania arranged for $6 million in fees from a $600 million government bond sale in 2013 to be paid to a local company owned by government officials.
The case relates to a $6 million bribe related to a private placing of sovereign notes to raise funds for the government of Tanzania, according to court documents.
“A local firm that received the $6 million was a ‘consultancy’ and the money was withdrawn in large amounts of cash days later. The cash has not been traced, said Mr Edward Garnier, the lawyer acting on behalf of the SFO,
According to him, the bank failed to prevent bribery by two executives at Stanbic Bank Tanzania Ltd. He said senior Tanzanian officials were involved and that the Prevention and Combating of Corruption Bureau (PCCB) was investigating.
The two executives involved, according to court reports, were Mr Bashir Awale, who was sacked in August 2013 for failing to cooperate with an internal investigation, and Ms Shose Sinare, who resigned in June 2013 to avoid investigation.
In May 2013, Mr Awale announced his departure after working as the chief executive for seven and half years before he was moved to Nairobi to head the bank’s Regional Investment Executive for East Africa in addition to Ethiopia and South Sudan.
Earlier this month, he was arrested by police on allegations of illegal stay. Mr Awale is said to be among campaign team members of former Prime Minister Edward Lowassa, who unsuccessfully contested the Union presidency through Chadema ticket with the backing of three other opposition parties under the Ukawa umbrella.
In an interview with The Citizen yesterday, PCCB Director General Edward Hoseah admitted that investigations into the bribery claims were ongoing.
“I have not seen the court ruling yet, but we are conducting an investigation on that and I’ll be in position to give more details after seeing the copy of the UK court’s ruling,” he said.
Stanbic Bank has been embroiled in various corruption scandals, including the infamous Tegeta escrow scam. Parliament last year directed investigative agencies to launch investigations into the bank’s involvement in the scandal. However, the outcome of the probe remains a mystery.
After failing to prevent bribery, Standard Bank now faces penalties of $32.2 million, including a $16.8 million fine to be paid to the SFO, a $6 million fine plus interest of over $1 million to be paid to the government of Tanzania, according to the SFO lawyer.
Yesterday, Kigoma Urban MP Zitto Kabwe called for investigations against those involved in the loss of Sh1.3 trillion, saying the country was not ready to see a repeat of what happened during the purchase of a military radar system from the UK company BAE in 2002.
“My party ACT-Wazalendo understands that part of that money was not channelled through the government’s account and the cost of the bond ballooned through middlemen, fuelling corruption in the deal,’’ added Mr Kabwe, who doubles as ACT-Wazalendo party leader.
He added that Stanbic Bank was involved in the Tegeta escrow account scandal and until now no steps have been taken against the bank although it failed to reveal the names of people involved.
