Mengi hits back, tells Rostam to come clean

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Dar es Salaam, Tuesday, May 05 2009

IPP Limited Executive Chairman Reginald Mengi yesterday challenged the Igunga Member of Parliament, Rostam Aziz, to come clean and publicly disclose the number of legitimate businesses that he currently owns.

At a news conference in Dar es Salaam yesterday, lawyers representing Mengi challenged Rostam to respond to widespread allegations that he has interests in at least three companies implicated in massive corruption scandals in the country - Dowans Holdings Limited, Richmond Development Company, and Kagoda Agriculture Trading Company Limited.

’’Let Mr Aziz tell the public in what capacity he was following up on payments for the companies from various banks in the country,’’ IPP Ltd Company Secretary and corporate counsel Agapitus Nguma queried before the packed-to-capacity news conference.

He said apart from disclosing what type of business(es) he is involved in within the country, the Igunga legislator should also make clear in which companies he is legally recognized as a bona fide director by the Business Registration and Licensing Agency (BRELA).

Armed with a loaded briefcase of documentary evidence, Nguma and private advocate Michael Ngalo also sought to dismiss various allegations made by Rostam against the IPP Ltd chief over the weekend.

They described Rostam’s media statement on Sunday as being baseless with no grain of truth, and went on to produce documents to counter each of Rostam’s allegations against Mengi.

Said Ngalo: ’’Honourable Rostam Aziz’s statement was full of personal attacks, which also targeted companies to which Mengi is shareholder. In his statement, Rostam failed to respond to the numerous allegations of graft being levelled against himself.’’

Dealing with the allegations made by the Igunga MP blow-by-blow, Ngalo produced documents to show that Independent Television Limited, Body-Care Limited, Bonite Bottlers Limited, and Anche Mwendu Limited had all repaid their Commodity Import Support (CIS) debts by last year.

’’Neither Reginald Mengi nor any of the companies which he owns have an outstanding CIS debt. All CIS debts have been repaid,’’ Ngalo declared.

According to the documentary evidence availed by the legal counsel, Bonite Bottlers was allocated a 160m/- CIS loan in 1991/92, but utilized only 159.7m/- and repaid over 396.5m/- between October 16, 1992 and April 15, 1994. Several cheques were paid in between the two.

As for ITV and Body-Care, documentary evidence shows that the two companies had an outstanding CIS debt of 852,554,975/- by February last year, which was settled through cheque number 166599202400 issued by IPP Limited from its Standard Chartered Bank account.

A letter to the Ministry of Finance, dated February 6 last year and signed by Nguma on behalf of Mengi, reads in its final paragraph: ’’Please confirm in writing that there is no liability outstanding in respect of CIS for Body-Care Limited and ITV - Independent Television Limited.’’

And a reply letter dated February 14 last year and signed by finance ministry senior official Ms M.N. Ngingite, with reference number TYC/E/450/11/05, states: ’’We would like to take this opportunity to acknowledge with thanks receipt of bank pay-in slip amounting to 852,554,972/45 with NMB Bank House branch, dated February 6, 2008.’’

’’We hereby confirm to you that you have been cleared of all your outstanding balances emanating from utilization of Commodity Import Support facility by your two companies,’’ the ministry’s letter continued.

Responding to Rostam’s allegations that Anche Mwendu defaulted on a 5bn/- debt obtained from National Bank of Commerce Limited, Ngalo said the bank only provided a letter of guarantee facility to enable the company to import a flask manufacturing plant from an Indian firm, JG Vaccum Flasks Limited.

’’The Indian company supplied Anche Mwendu with a different plant - not that used for manufacturing flasks as required. NBC demanded repayment of the debt, but no cash was ever paid, so we went to court where a judge dismissed the case,’’ Ngalo said.

He said High Court judge Thomas Mihayo’s 1993 verdict dismissing NBC’s loan demand to Anche Mwendu for failing to prove that the money was actually paid out, had never been overturned and thus remains valid.

Ngalo was also dismissive of allegations that, as one of the major shareholders of National Investment Company (NICO), Mengi unduly influenced the board of directors to invest in a non-viable company, Interchem Pharma Limited, which is owned by his brother.

The advocate said Mengi, who was chairman of NICO’s investment committee, was never involved in this decision taken by the board of directors, and that when he later became aware of it, he resigned from his position.

A letter dated August 7, 2007, signed by Mengi himself and addressed to NICO Board chairman Felix Mosha, states point-blank his reasons for resigning as being the fact that NICO had decided to invest in Interchem Pharma Limited.

’’This investment was not recommended by the investment committee, because the proposal thereof was not submitted to the committee as it was required. In other words, it was approved by the board without the recommendation of the investment committee, of which I am the chairman,’’ Mengi wrote in the letter, also produced at yesterday’s news conference - ThisDay Reporter