Seth seeks plea bargaining, Ruge writes DPP to drop case

Dar es Salaam. Mr Habinder Seth--who is a co-accused of Mr James Rugemalira in an economic crimes case--has written to the Director of Public Prosecutions (DPP) to express his intention to enter into a plea bargaining arrangement in seeking his release from remand prison.

His lawyer told Kisutu Resident Magistrate Huruma Shahidi when the case came for hearing yesterday that his client had written to the DPP to inform him of his intention to enter into a plea-bargaining deal with the authorities.

However, according to a letter seen by The Citizen to the DPP, Mr Rugemalira, unlike his co-accused, has request to be set free so that he would enable the government recover the money swindled through the Tegeta Escrow account.

In the letter, which was mentioned in court yesterday, Mr Rugemalira claims that the money swindled through the Tegeta escrow account was much more than what he and Mr Sethi were being accused of stealing. Mr Rugemalira claims that he is owed by a foreign bank a total of Sh37 trillion, from which the government can get Sh6 trillion in taxes. Mr Seth is the owner of the Pan-Africa Power Solution Tanzania (PAP) while Mr Rugemalira, is the owner of VIP Engineering and Marketing Company.

Both Rugemalira and Mr Seth jointly ‘own’ Independent Power Tanzania Limited (IPTL) -- and are both accused of illegally siphoning off Sh306 billion from the Tegeta Escrow Account at the Bank of Tanzania (BoT) which had been jointly opened in 2014 by the state power monopoly Tanzania Electric Supply Company (Tanesco) and IPTL pending a resolution in local and international courts of a tussle over capacity charges between the two.

The co-accused face six charges of economic sabotage, forgery, impersonation, running a criminal syndicate, obtaining money by false pretences, and causing loss to the government.

The two, who were at the centre of one of Tanzania’s monumental scandals in recent history, first appeared in court almost three years after Parliament recommended their prosecution.

In ant case, Mr Seth and his co-accused, Mr Rugemalira, were sent back to remand until October 24 when their case will come up for hearing and the court.

The two were first arraigned in court in June 2017, after which investigations into the alleged crimes were ongoing. Mr Seth was arrested at the Julius Nyerere International Airport in Dar es Salaam as he and his wife were about to fly out of the country.

At the time, their arraignment was seen as a bold move by the government to bring to justice suspects implicated in mega scandals.

Tabling the report in the National Assembly meeting in the nation’s capital Dodoma in November 2014, Kigoma-Urban Member of Parliament Zitto Kabwe - who was the-then PAC chairman, and his vice chairman Deo Filikunjombe (now the late) - said Mr Seth, working in collaboration with high-ranking state officials, hatched a plot to swindle the billions from BoT.

With the resulting resignation of former Attorney General Frederick Werema, the-then minister for Lands, Housing and Human Settlements Development, Prof Anna Tibaijuka, and her Energy counterpart, Prof Sospeter Muhongo, the Tegete Escrow swindle became one of the mega scandals during President Jakaya Kikwete’s Administration.

IPTL was founded by two companies, namely VIP Engineering - owned by Mr James Rugemalira who had 30 per cent stake in IPTL - and Mechmar of Malysia.

But, before the withdrawal of the Tegeta Escrow funds from BoT, PAP - under Mr Seth - purportedly acquired 70 per cent of IPTL from Mechmar, in what seemed to be a dubious deal.

What brought the transaction into question was the fact that, at the time of the purported sale of shares, IPTL had a power plant located in Tegeta, Dar es Salaam, worth millions of dollars plus cash totalling $250 million—including $122 million that was sitting idle in the Tegeta Escrow account held at the central Bank of Tanzania.

Billions were paid to Mr Seth from the Escrow Account - apparently after he convinced the relevant officials that he had acquired 70 per cent stake in IPTL from Mechmar, and which enabled him to reach out-of-court settlements with Rugemalira’s VIP Engineering and Marketing.

To reach a deal with VIP Engineering, Mr Sethi had to pay $75 million to acquire 30 per cent of IPTL - thus assuming full control of the Tegeta Escrow billions, as well as the IPTL power plants.