The former president Benjamin Mkapa (right) and his energy and minerals minister Daniel Yona.
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A PAPER trail left behind after the controversial privatisation of the state-owned Kiwira Coal Mine in 2005 has unearthed evidence of obvious abuse of office by former president Benjamin Mkapa and his energy and minerals minister Daniel Yona.
Painstaking investigations by THISDAY have succeeded in unravelling the intertwining interests of the two once all-powerful politicians and their immediate families in this apparently-lucrative but astonishingly-secretive deal.
For chronological purposes, the beginning of the story can be traced back to 1999, when Mr Mkapa and first lady Anna Mkapa founded a private company called ANBEM Limited while they were still occupying public office at State House.
This company would in late 2004 enter into a partnership with another private company, DEVCONSULT Limited, in which Yona and his son are sole shareholders, to establish Tanpower Resources Limited.
They were joined in the Tanpower Resources shareholding structure by at least three more companies, two which were Fosnik Enterprises ? in which the ex-president’s son Nicholas Mkapa and his wife Ms Foster (Mbuna) Mkapa are sole shareholders ? and Choice Enterprises ? whose majority shareholder is Nicholas’ father-in-law Joseph Mbuna.
And hardly six months after its formation, the seemingly obscure Tanpower Resources swiftly moved in to take over the Kiwira Coal Mine - with very few people in government actually aware of the real, powerful forces behind the company.
Following is a chronology of official events and happenings, backed by a paper trail of evidence, that suggest a planned and systematic abuse of public office by people perched at the very top of government, culminating in the takeover of the potentially very rich (and formerly state-owned) Kiwira Coal Mine in Mbeya Region:
June 22, 1999
While serving as sitting president and first lady of the United Republic, Mr and Mrs Mkapa officially registered ANBEM Limited in Dar es Salaam as a private company in which they were sole directors, shareholders and ?entrepreneurs?, as described in the company documents. Among other things, the stated objectives of ANBEM Ltd include: ?To carry on business and to act as merchants, general traders, warehouse, stockists, shopkeepers and operators of supermarkets, commission agents and carriers.?
From 1999 to 2005 -
When Mr Mkapa completed his second and final term in office as per national constitution ? the private business affairs of ANBEM Ltd were conducted from registered offices at Plot Number 15, Luthuli Road, which is a building within the official State House walls in Dar es Salaam.
July 2002
When ANBEM Limited was three years old ? and with its sole shareholders still occupying public office at Ikulu ? the company applied for and was granted a loan of $500,000 (approx. 650m/-) from the National Bank of Commerce (NBC) Limited. This loan came on the heels of a heated national debate over the privatization of the previously state-owned bank, which was fiercely opposed, amongst others, by the Father of the Nation, Mwalimu Julius Kambarage Nyerere, until his death in 1999.
Several members of parliament from both ruling and opposition parties were also strongly against the bank?s privatization, arguing that the once-giant national institution was being sold off far too cheaply. But as eventually transpired, the privatization of the then NBC (1997) Ltd still went ahead as scheduled, with the formation of NBC Ltd in April 2000 and acquisition by South Africa?s ABSA Group of 70 per cent of the bank?s shares - for a reported total price of just 15bn/-.
Records will show that Mr Mkapa, as sitting president, was always a vocal supporter of the bank s privatization process resulting in its takeover by ABSA Group - whose direct association with NBC actually began in August 1999 when the South African firm effectively started managing the bank at the request of the third phase government under Mr Mkapa.
December 2002
A few months after securing the NBC Ltd loan, ANBEM Ltd landed another big credit-line in the form of a 250m/- loan granted by CRDB Bank Limited. During the same year, the then president Mkapa announced a cabinet reshuffle which included the appointment of senior cabinet minister Daniel Yona to head the crucial energy and minerals portfolio. As the minister for energy and minerals, Yona’s duties included overseeing the then still state-owned Kiwira Coal Mine Limited, and coordinating its pending privatisation process.
December 29, 2004
The registration of Tanpower Resources Company Limited - a private company formed as a joint brainchild of then president Mkapa and energy and minerals minister Yona is completed, with its stated objectives including to carry on the business of miners of coal and iron; to process such coal and iron and generally treat, prepare, render marketable, sell and dispose of such coal and iron or by-products resulting therein in their raw or manufactured state.”
The company is also licensed to ”deal with coal mining in order to generate electricity for consumption and sale; to generate power generators, transmitters and general distributors; and to provide power and general projects management, project appraisers and consultants.”
At the time of its registration, the first listed directors of Tanpower Resources were the then first lady Mrs Anna Mkapa; the then minister for energy and minerals Daniel Yona; Nicholas Mkapa (the president and Mrs Mkapa’s son); Joseph Mbuna (Nicholas Mkapa’s father-in-law); and one Evans Mapundi. Mrs Mkapa sat on the board as a representative of ANBEM Limited: Yona from DEVCONSULT Ltd; Mkapa junior from Fosnik Enterprises; Mbuna from Choice Enterprises; and Mapundi representing yet another company, Universal Technologies Limited, in which he shares ownership with one Wilfred Malekia.
During this period, Mr Mkapa and Yona - through their positions in government - were deeply and directly involved in the pending privatisation of the Kiwira Coal Mine.
Mid 2005
Tanpower Resources enters into a joint venture with the government and acquires 70 per cent of the shares in Kiwira Coal Mine. The private company later increases its shareholding in the coal mine to 85 per cent, leaving the government with just 15 per cent. The president’s son, Nicholas, is appointed a member of the renamed Kiwira Coal and Power Limited company board of directors, while his father-in-law Joseph Mbuna becomes board chairman.
Other shareholders of Tanpower Resources, Wilfred Malekia and Evans Mapundi, are also named on the new Kiwira board. The privatised Kiwira Coal and Power Ltd is also given control of the Kabulo coal prospect, a separate additional area owned by the government with proven lucrative coal deposits. The State Mining Corporation (STAMICO), a government-owned agency, is kicked out of the Kabulo project which has proven reserves of up to 14 million tonnes of coal.
December 2005
President Mkapa retires from office at the end of his final two terms in office, as per national constitution. Yona also announces his retirement from active politics.
March 2006
On the basis of fast-tracked negotiations already concluded by the Mkapa administration, the fourth phase government under President Jakaya Kikwete signs a 20-year deal worth all of $271m (approx. 340bn/-) with the Kiwira coal-fired power project. But government officials now privately tell THISDAY that the contract, which is basically between Kiwira Coal and Power Limited and the Tanzania Electric Supply Company (TANESCO), is steeped in controversy and dubious details - and could end up being an expensive quagmire for the national economy on a scale even worse than the infamous IPTL affair of 1995.
August 2007
THISDAY begins publishing exclusive reports on the Mkapa-Yona link in the Kiwira coal project. The Tanpower Resources file, which had been missing in public records, mysteriously resurfaces, but with a one-page resolution now inserted inside which purports to show that ANBEM Ltd (the company owned by the ex-president and his wife) forfeited its 200,000 shares in Tanpower Resources on January 10, 2005.
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