Radar partners split up as prosecution beckons
-PCCB expects to file charges through DPP within next three months
THISDAY REPORTER
Dar es Salaam
THE Prevention and Combating of Corruption Bureau (PCCB) is finalising a criminal prosecution case against at least one possible suspect in the 28 million pounds sterling (approx. 70bn/-) military radar deal approved in 2002 by the third phase government under former president Benjamin Mkapa.
''We are almost done with investigating this case, and I think we have a case,'' PCCB director general, Edward Hosea, was quoted by Britain's Financial Times newspaper in a newly-filed report from Dar es Salaam.
The highly reputed British defence manufacturer company BAE Systems is understood to be facing fresh pressure over the sale of the radar system to the Tanzanian Government, a deal now under parallel investigations by the UK's Serious Fraud Office and its Tanzanian counterpart, the PCCB.
At the heart of both probes are payments amounting to about 30 per cent of the contract's value, allegedly made by BAE Systems to a Tanzanian agent who helped broker the deal.
Hosea said he expected within the next three months to ask the director of public prosecutions (DPP) to file criminal charges, although according to him, he could not name his targets as the investigation is on-going.
However, people close to the investigation have told the Financial Times that Hosea is not expected to target BAE.
Meanwhile, according to the PCCB boss, the SFO is assisting by finalising the 'natty gritty' of 'tracking the money'.
Investigative interest in the radar deal has been rekindled since the British Government in December ordered the SFO to drop its probe into the 20-year-old al-Yamamah deal for BAE to supply Saudi Arabia with fighter jets. The US Justice Department has since launched its own investigation into whether that deal broke anti-corruption laws.
The SFO is continuing to investigate allegations of bribery by BAE in South Africa, Romania, Chile and the Czech Republic, as well as Tanzania.
SFO assistant director Ms Helen Garlick said both her agency and the PCCB were cooperating to complete investigations into why BAE used a British Virgin Islands company to enter into an agreement with a Panamanian company to provide 'advice and various services' in connection with the Tanzanian radar deal.
Under this agreement, Ms Garlick claimed, BAE made payments in excess of $11m (approx. 14.3bn/-) to one Shailesh Vithlani, who is understood to have been the agent behind the deal through his Dar es Salaam-based company Merlin International.
SFO investigators visited Dar es Salaam, Tanzania's capital, last year and interviewed both Vithlani and Tanil Somaiya, his Merlin International business partner at the time of the deal.
Said Ms Garlick: ''We have nothing but respect for the integrity and persistence of the PCCB. We have been working closely with them and will continue to do so.''
A BAE Systems company spokesman said the company was also cooperating fully with the SFO investigation. ''As this is a continuing criminal investigation, it would be inappropriate for us to comment on the substance of the investigation,'' the spokesman said, adding: ''This cannot of course be taken as any kind of admission.''
Lawyers for Somaiya said he ceased being a shareholder and director of Merlin International on January 8 this year, and added: ''Our client had no prior knowledge and was not aware of the alleged $11m commission payment by BAE to Vithlani at all.''
At the office of Vithcorp Food Packers, another company owned by Vithlani in Dar es Salaam, staff said the businessman - who holds a UK passport - was out of the country. He did not respond to a request for comment.
According to the findings of earlier investigations by THISDAY, Merlin International Limited is a small, low profile local company but with established big business contacts in government circles, whose meteoric rise can be traced back to some 20 years ago in the lakeside city of Mwanza.
It is understood that the company is actually the joint brainchild of both Vithlani and Somaiya, who grew up together as bosom friends in Mwanza.
Records show that Merlin International was originally registered on March 27, 1986, with Vithlani (8,000 shares) and Somaiya (2,000 shares) identified as its two listed shareholders at the time of its formation.
It began operating in Mwanza Region in relative anonymity, dealing in general merchandise and imported goods, and in August 1998 a report was filed with the registrar of companies to indicate that the company had shifted the location of its main offices to Dar es Salaam.
Since then, the company has become inexorably linked with some of the country's biggest defence procurements, including the controversial military radar transaction now under official investigation.
But while Vithlani continues to serve as Merlin International's chairman and managing director, it now appears that Somaiya - a recognized Tanzanian national who also owns other local companies including telecommunications entity Shivacom Limited � has parted ways with the company.