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Monday, May 11, 2009

TweetThis! No sign of them anywhere any more - CIS (Tanzania)

This country will just never cease to amaze it's people. Oh!
Latest findings show that: 16 ’ghost’ companies on list of CIS debtors

AT least 16 ’ghost’ companies are amongst those that looted billions of shillings from the Commodity Import Support (CIS) fund, it has been revealed.

The non-existent companies are included in a list of more than 900 firms that received a staggering 180bn/- from the CIS fund during the time it was being administered by the Ministry of Finance.

A check on the official addresses of all the listed companies has established that after receiving their share of the loot, the obscure firms have long since disappeared into thin air.

The ’ghost’ companies appear to have sprung up virtually out of nowhere, on the back of a legitimate and well-connected local trading network.

According to findings by debt collectors hired by the government to recover the CIS funds, it is not even clear any longer whether the 16 companies ever existed at all, other than on paper.

The executive director of the independent debt collection company commissioned by the government to recover the CIS money, Ibrahim Msolopa, confirmed that his company has been unable to trace the whereabouts of at least 16 companies on the list.

The firms appear to have been fraudulently paid billions of shillings from the CIS fund through falsification of their records at the Business Registration and Licensing Authority (BRELA).

’’We have been unable to make any headway on these companies, despite all our efforts so far. But we are still continuing,’’ Msolopa told THISDAY in an interview in Dar es Salaam.

He declined to name the ’ghost’ companies in question nor disclose their total debts, saying his debt collection agency - Msolopa Investment Company Limited - is still in the process of compiling its report.

It is understood that the physical verifications of listed addresses for the said ’ghost’ companies revealed that none of the firms ever occupied their registered offices.

Sources familiar with the CIS scam say the apparent looting of public funds using shell companies is a similar technique to the fraud used in the Bank of Tanzania’s (BoT) external payment arrears (EPA) account embezzlement scandal.

According to Msolopa, only 40 companies had by last month fully repaid their debts from the CIS fund.

He noted that while legitimate businesses appear to be cooperating to repay their loans, debt collectors are having their jobs cut out for them in trying to recover the money from fraudulent companies.

It is also understood that while several of the companies on the list appear to be making some efforts to repay their debts, others have not only refused outright to pay up, but are even issuing threats to debt collectors.

Msolopa told THISDAY last week that the company is now seeking police assistance in the task of recovering CIS money from hostile debtors following the recent spate of serious threats against debt collectors.

The debt collection company is set to meet soon with senior officials from the Ministry of Finance and Economic Affairs, and the Tanzania Revenue Authority (TRA), to discuss the next move to be taken against the bad debtors.

In his latest government audit report, the Controller and Auditor General (CAG), Ludovick Utuoh, also cited the CIS funds scam as one of the major issues that need to be seriously addressed by relevant authorities.

CAG Utouh said instead of just concentrating on the EPA account scandal, the government should broaden its anti-corruption horizons to include scandals like the CIS funds debacle - THISDAY REPORTER, Dar es Salaam

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