Hebu tujikumbushe kidogo ya nyuma ......................
Tanzanian tycoons divulge getting $12m secret payout
2007-01-16 10:15:02
By London
TwoTanzanian business moguls have admitted they were secretly paid $12m/- by UK`s biggest arms supplier in a controversial deal in, which Tanzania bought an obsolete military radar system.
The tycoons, Sailesh Vithlani and business partner, Tanil Somaiya made the admission to British detectives who recently flew into the country to investigate graft allegations in the controversial sale of the radar by BAE.
Vithlani, who acted as a middleman in the deal and has a long-standing relationship with military and government figures, has admitted that the sum was covertly moved to a Swiss account by BAE Systems, which is under investigation by the Serious Fraud Office.
The SFO, which was recently forced to abandon its investigation into commissions paid on a massive arms contract with Saudi Arabia, is now focusing its attention on Tanzania.
The back-door payment represented 30 per cent of the contract value. Tanzania had to borrow to finance the deal, which critics said was unnecessary and overpriced.
The duo is expected to act as prosecution witness in the BAE`s corruption case.
In Dar es Salaam, Vithlani`s business partner, Tanil Somaiya, told the London Guardian that British police had already flown out to trace and interview both men as potential witnesses.
The admissions by Vithlani, has led to calls in London for BAE's prosecution if the allegations were proved.
Vithlani was the majority shareholder in Merlin International Limited, Somaiya said, while he had a small token interest himself. BAE paid $400,000 down this route in stage payments, Somaiya said, as the radar equipment was delivered.
Vithlani acted as agent not only on the radar deal but also in the 2002 purchase from the US of a top-of-the-range Gulfstream official jet for the then Tanzanian president, Benjamin Mkapa, at a cost of more than $40m.
Police sources in Dar es Salaam said the agreement to use Vithlani as an agent had been signed off by the then chairman of BAE, Sir Dick Evans.
Sir Dick, who has been at the centre of many of the arms deals under investigation, has already been interviewed by the Serious Fraud Office during their two-year inquiry.
When asked about the BAE money, Vithlani told the Guardian he had made no disbursements from the Swiss cash to public officials in Tanzania. Asked if he had disbursed any of the $12m to third parties outside of Tanzania, he declined to comment.
"When the UK police travelled to Tanzania, we met them at their request and answered all their questions," he said.
At the same time, it has emerged that British Premier, Tony Blair supported the 2002 sale, a move that was fiercely opposed by former cabinet minister Clare Short and the chancellor, Gordon Brown.
Clare Short said the prime minister had been personally responsible for forcing the licence for the Tanzania deal through the cabinet. "It was always obvious that this useless project was corrupt," she said.
He said BAE had made two parallel arrangements with the middlemen. In the first, a conventional agency agreement was signed.
Under this, 1% commission was to be paid if the $40m radar deal went through, to a Tanzania-registered firm, Merlin International Ltd.
But under a second, more unusual agreement, BAE`s secretly owned offshore company Red Diamond deposited another $12m, representing 30% of the contract price, in Switzerland.
That money was under the personal control of Vithlani, Somaiya said, and this had been admitted to UK police.
When asked if he would allow British police to inspect all the transactions on his Swiss account, he declined to comment.
In the secretive world of international arms deals, a commission of 1% to local agents would generally be regarded as legitimate.
The government's export credit agency, the Export Credits Guarantee Department, has guidelines under which a ``commission`` of more than 5-10% is automatically regarded as questionable.
BAE System's payment of as much as 30%, coupled with the use of a Swiss bank account and apparent double sets of agency agreements, would normally arouse suspicions of possible bribery, investigators say.
BAE Systems were yesterday asked why they had made a 30% payment to Vithlani`s Swiss account.
The company refused to answer, saying: "We will not be commenting on any point of substance. This cannot of course be taken as any kind of admission."
The SFO also refused to discuss their investigation. President Jakaya Kikwete, is due in London today to speak at a meeting with Hilary Benn, the international development secretary, on efforts to overcome corruption in Tanzania.
Later this week, the UK is expected to have to defend its actions over BAE at a meeting of the anti-bribery group of the OECD in Paris.
Leo T. Somaiya anaichangia CCM. Ingekuaje mchangiaji angekuwa Chenge. Wote bado ni watuhumiwa tu na wote wana mamilioni nje.