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Two Tanzanian energy tycoons charged over graft scandal

Tanzania High Court

Nairobi, Kenya, June 20 – Industrialists to be charged over a multi-million-dollar graft scandal that led to the sacking of several top officials three years ago.

A 2014 audit created an uproar after showing fraudulent payment of some $120 million (107 million euros) in state funds to an independent power producing company, prompting several foreign donors to halt aid to Tanzania.

James Rugemalira and Harbinder Singh Seth, who were charged Monday with economic crimes, were co-owners of the Independent Power Tanzania Limited (IPTL) power company which had a contract to supply electricity to the state-owned energy provider Tanesco.

Tanesco and IPTL had created a joint escrow account from which payments were siphoned off to a private company as well as to offshore bank accounts of government officials, the audit showed.

In the wake of the scandal the country’s energy minister and attorney general quit and the lands minister was fired.

Several other top officials also lost their jobs in one of the biggest corruption scandals in Tanzania’s history, however no one was jailed.

“People have been wondering about our investigation for a while,” the head of the country’s anti-corruption office Valentino Mlowola told journalists.

Mlowola, recently appointed by President John Magufuli who has vowed to crack down on corruption, said an “exhaustive investigation” had been needed.

Opposition lawmaker Zitto Kabwe, who led the initial audit, wrote on Twitter that the arrest of Rugemalira and Seth was the “single most bold step by President Magufuli against corruption”.

Observers said the trial could once again blow open the sensitive case and possibly lead to further charges against former top officials.

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At the time a parliamentary probe found that senior government officials had “facilitated or helped with the laundering of money, tax evasion, acts of corruption and the pure and simple theft of billions of shillings from public coffers.”

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