CAG finds anomalies in TIB Development Bank lending
Dar es Salaam. The Controller Auditor General (CAG) has uncovered anomalies in TIB Development bank lending, saying it may cause a deterioration in the quality of the bank’s portfolio.
The CAG audit report for 2016/17 showed that the bank granted loans and financing to different projects without perfection of securities.
“Disbursing loans without perfection of security increases the risk of not recovering loaned funds which would eventually affect the performance of the bank due to non-performing loans,” says CAG.
TIB Development Bank is advised to undertake a detailed review of the pledged securities including assessment of security valuation.
The report shows that TIB Development bank granted Sh2.9 billion to finance the Development of Kaboja Industrial City situated at Kihangaiko Village in Bagamoyo-Msata in December 2014 with guarantee from parent company Syscorp Corporation Limited. However, CAG said he was not provided with security documents such as tittle deeds. There is no evidence that the respective securities were registered with the bank, the bank also said.
Another $27.18 million loan was granted to Tanzania Petroleum Development Corporation (TPDC) to pay for an invoice of 80mmscf/d of gas.
The securities pledged against this loan included TPDC entitlement of Cost Gas and profit gas receivables of Mnazi Bay Gas Sales Agreement, where the corporation has 20 per cent participating interests. CAG said there was no evidence that TIB finalized perfection of the security. The report shows NHC was granted a Sh30 billion loan to finance construction of Golden Premier at Upanga.
which was later shifted to Kawe as Golden Anniversary.
From this arrangement NHC was extended with temporary arrangement in the form of bridge finance amounting Sh7 billion for Morocco Seven Eleven Project.
“There is no evidence indicating that TIB undertook preliminary assessment and evaluation of Morocco Seven Eleven Project prior to approval and disbursement of Sh7 billion,” CAG says.
