Tanzanian Association Oslo

No trace of company that

BoT paid 40bn/-:

Appears to have disappeared

into thin air

THISDAY REPORTER

Dar es Salaam

MYSTERY surrounds the actual physical location of a Dar es Salaam-registered private company at the centre of the latest revelations of massive funds fraud at the Bank of Tanzania (BoT).

The virtually-unknown Kagoda Agriculture Limited, which in late 2005 was paid nearly $30.8m (approx. 40bn/-) by BoT through the use of apparently forged documents, lists Plot Number 87 in the Kipawa industrial area in Temeke District on the outskirts of the city as its official office premises.

But despite a physical visit by THISDAY coupled with a series of inquiries at the Ministry of Land, Housing and Settlement Development, it has proved quite impossible to locate the said plot where the company’s offices are supposed to be.

’’I’m afraid we do not have such a plot listed in our Land Registry Office,’’ a ministry official said when asked to help locate the stated address.

At the same time, it has come to light that although the Kagoda company’s registered address is plot number 87, Kipawa industrial area, there is no evidence that the firm ever carried out any business activities whatsoever, or even that the Tanzania Revenue Authority (TRA) received any tax on the billions of shillings that passed through its account.

Even more mysterious is the actual whereabouts of the company’s listed directors and shareholders, John Kyomuhendo (40 shares) and Francis William (60 shares), who both share the same postal address (PO Box 80154, Dar es Salaam) and are listed as residents of Dar es Salaam.

Sources familiar with the whole, increasingly-messy issue say Kyomuhendo works with a big construction company located in the same Kipawa area, but is known to be using an alias to conceal his surname.

Official government records show that Kyomuhendo and Francis William registered the Kagoda company on September 29, 2005, with certificate of incorporation number 54040, an event witnessed by one Benjamin Mwangonda who was described as an accountant with Khatco Management Limited.

Among other things, the company’s stated objectives include: ’’To carry on the business of agriculture and farming of all types of food, cash and permanent crops, breeders of livestock, dairy farmers. Breeders of chicken, ducks, turkeys, geese, dealers, processors, exporters and importers and vegetable farmers.’’

Kagoda Agriculture Limited is also licensed to ’’distribute meat, eggs, chicks, poultry feeds, poultry medicines, and poultry equipment; export fresh vegetables; conduct florist activities; and engage in the business of building farm houses, cold rooms and roads.’’

It has been revealed that auditors last year discovered a pattern of massive fraud in the payments made by BoT to the company, whereby various facilitation documents appear to have been clearly forged.

The auditors, Deloitte & Touche, also asserted in their report that senior BoT officials had colluded in the matter, recommending that the officials involved be suspended and urgent action including ’’an immediate and thorough investigation’’ be instituted.

But the BoT governor, Dr Daudi Ballali, opted to ignore the recommendations and did nothing. And it was only in September of this year that the government did launch a special audit on the BoT, following pressure from donor countries and the International Monetary Fund (IMF).

At the heart of the special audit conducted by another firm, Massawe Ernst & Young the verdict of which is expected in January - was the balance sheet of the BoT’s external payment arrears account for the year 2005/06.

Meanwhile, BoT insiders are now strongly hinting that the dubious $30.8m payments to the Kagoda company were not an isolated incident, with another $200m (approx. 240bn/-) or so also squandered in the same scam involving a number of other suspected ’shell’ companies.