Probe committee uncovers major sisal scandal

Dar es Salaam. The committee formed by Prime Minister Majaliwa Kassim in November last year to investigate post-privatisation of Tanzania Sisal Authority (TSA) properties has uncovered major scandal involving Katani Limited, the sector’s strategic investor, and officials of the authority.

The preliminary findings of the investigations presented to the PM yesterday in Tanga by the chairman of the committee Mr Jared Kusaya, who said at least 200 people were questioned during an investigation work. The committee involved 13 members from the office of Prime Minster, Ministry of Agriculture, office of Attorney General, Police, Tanzania Revenue Authority (TRA), Prevention and Combating Corruption Bureau (PCCB), office of Director of Public Prosecution (DPP) and National Social Security Fund (NSSF)

Mr Kusaya presentation which was televised by the State broadcaster -TBC has revealed irregularities in sale of the authority’s properties without the involvement of the Treasury Registrar and failure by Katani Limited to repay loans obtained from the National Social Security Fund (NSSF).

The government privatized some of the sisal authority’s properties in 1998 to Katani Limited, the local strategic investor, headed by Mr Salum Shamte, who is currently behind bars over alleged economic crimes.

The findings have shown that all the activities were conducted against the contract signed between the government and Katani Limited during privatisation processes, way back in 1998 and 2007.

The findings have mentioned Mr Shamte, Mr Ali Mnyani, Mr Francis Nkuba, Mr Andrew Boimanda, Mr Yusuf Maumba and Mr Frank Maro as key persons involved in the scandals.

Other findings according were the failure of Katani Limited to pay sisal farmers, presentation of false statement by Katani and the liquidator to hold public funds for 30 years.

Explaining on the irregularities in sale of the authority’s properties, Mr Kusaya said this involved the illegal sale of various residential houses; sale of 30 per cent stake of Mkonge Hotel without involving Treasury Registrar; the sale of two authority’s houses based in London and sale of 30 per cent stake of Mluwazi estate.

There were also irregularities in the sale of the authority’s residential houses which were used by its officials, of which one of them were sold to the liquidator, against the directives of the council of ministers.

The firm was also involved with the sale of two authority’s houses based in London, United Kingdom, while knowing that they were public properties, and there is no any documentation for the sale.

Katani Limited has also accused taking loans; include $6.5 million, $10 million, Sh1.2 billion and Sh400 million from the National Social Security Fund (NSSF) for boosting production, but only $1.4 million repaid and other were diversified its use.

“All loans were taken using the available authority’s properties, of which some are belong to the government through Treasury Registrar,” he said.

The committee has therefore suggested the NSSF to take over all sisal processing machines, currently operated by Katani Limited as part of measures to regain borrowed funds.

The findings has also revealed that Katani Limited sold 30 per cent stake of the Tanga based Mkonge Hotel, belong to Sisal authority to Kurasini Development Limited, while knowing that it was belong to the government.

Another irregularities uncovered by the investigation included the sale of 30 per cent of Muluwazi Sisal estate to Mr Hamis Mapunda, who was the TSA chairman.

In the other incident, the investigation has revealed that the liquidator has also stayed with $82,000 and Sh31 million in his personal account since 1998, which are belong to the Treasury Registrar.

Responding to the report, Mr Majaliwa said the investigation can’t compromise an ongoing court proceeding against Mr Shamte and other officials of Katani Limited.

He said the government plan was to enable the revival of sisal sector, which was considered as ‘white gold” by resident of Tanga region.

Tanzania is currently the second major sisal producer in the world behind Brazil. It produces 40,000 tonnes of sisal per anum with employment of 100,000 people.