The government has challenged Kigoma Urban MP, Zitto Kabwe, to submit any report on the USD 80million corruption scandal involving Stanbic Bank that has seen the country recover only USD 6million for further legal actions against the financial institution.

Kigoma Urban MP, Zitto Kabwe                  

The government has challenged Kigoma Urban MP, Zitto Kabwe, to submit any report on the USD 80million corruption scandal involving Stanbic Bank that has seen the country recover only USD 6million for further legal actions against the financial institution.
 
Attorney General (AG), George Masaju, made the remarks in Parliament on Monday, stating that the government was ready to involve both local and international legal experts to file a criminal case against the bank if it got a detailed report from the legislator.
 
“If the legislator has a good report that can help us take further action against the bank, I request him to bring it to the government to enable us take legal measures,” said the AG.
 
He said the Serious Fraud Office (SFO) in England agreed with the bank on repayment, failure of which it would take legal actions against the financial institution. 
 
The AG was responding to a question by the Kigoma Urban legislator who wanted to know why the government had failed to take action against the bank by compelling it to pay more fines.
 
Zitto also questioned why the Controller and Auditor General (CAG) had not conducted serious investigations on debts and payments in the period that the payments, which led to the said scandal, occurred.
 
But the AG responded that CAG had a constitutional obligation to carry out such investigations to ascertain the loss realised by the government.
Earlier while responding to the main question, deputy minister for Finance and Planning, Dr Ashatu Kijaji, said Zitto did not clearly state how the government lost US$ 80.0 million.
 
She said: “The MP did not provide any evidence on how the government lost the alleged amount of money but instead mentioned a report of the Corruption Watch that was quoted in a story carried in the daily English paper.”
 
The deputy minister also said the government had taken various actions, including through a Bank of Tanzania letter to Stanbic Bank, demanding 3 bn/- fine in connection with the scandal.
 
“The law is very clear that the financial institution had 20 days that ended on 30 January to submit a letter of defense. If BoT is not satisfied, Stanbic has to pay the fine,” she told the House.
 
Recently, the  UK’s first Deferred Prosecution Agreement (DPA) centred on the 12bn/- (USD 6 million) Stanbic Bank bribe scandal has been faulted for short-changing Tanzania in terms of the compensation awarded.
 
 The UK’s Corruption Watch has also criticised the DPA and Serious Fraud Office for not charging the Standard Bank officials involved in the lucrative fundraising deal from the government.
 
So far, no legal action has also been taken against the local wheeler-dealers of the USD 600 million private bond placement as well as Stanbic Bank officials behind the whole bribery scam. 
 
“If DPAs are to act as a serious deterrent to bribery and economic crime, and to garner public confidence, they cannot be a means for individuals to be let off accountability for their actions or for companies to escape the full harm of their wrongdoing,” the British anti-corruption watchdog said in a statement. 
 
It called on Serious Fraud Office and the judiciary to consider seriously if the precedents set in the DPA would genuinely deter wrongdoing and let the real victims of corruption, in this case the Tanzanian people, see justice. 
 
“Standard Bank agreed to pay USD 6 million compensation to Tanzania based on the calculated harm to the country. These are relatively low financial penalties that do not reflect adequate compensation or disgorgement of profits. But compensation may have been well over ten times higher, possibly as high as USD80 million - if the full harm to Tanzania had been taken into account,” Corruption Watch argued.
 
The activist organisation further argued that the DPA did not also address the issue of profits disgorged by the bank, which were set at USD8.4 million. It also failed to take into account revenue streams made by the bank on the transaction - which could have been up to USD10 million - nor the market advantage achieved by the financial institution as a result of the wrongdoing.
 
DPAs were introduced in the US to give the most vulnerable in society a second chance by allowing them to prove good behaviour rather than be prosecuted. They have been increasingly used in the US over the past decade to give that second chance to the most powerful in society.
 

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