How Kariakoo Traders Defrauded Stanbic Bank

[maroon7]

Hawa jamaa wanafanya mambo kama si wasomi halafu wanaishia kuwawajibisha watu wengine kabisa, hebu cheki hii

Dar es Salaam. A Harvard-tailored banking scheme that was fully controlled from Santiago, Chile, has cost Stanbic a loss of Sh15 billion, The Citizen has reliably learnt.

Standard Bank (Stanbic) bought the banking product made in Harvard and introduced it at the busy Kariakoo market -- despite protests from its local top management -- in the hope that it would boost its presence and profit. Attracted by the multimillion-shilling transactions at Kariakoo everyday, Stanbic gave traders in the busy inner city Sh18 billion-worth of unsecured loans last year.

The only collateral that was needed to borrow money was that the applicant undergo a psychometric analysis The test is a method by which a person can sense or "read" the history of an object by touching it. Banks and other organisations use psychometric analysis to find out the most able and best suited persons for a job or course of study.

In the case of Stanbic Tanzania, the computerised system was used to identify the best and worst people to give the loans to. A total of Sh18 billion was issued to Kariakoo traders on the basis of the system. Another Sh26 billion was issued as personal loans to company employees, with just the salary slip as collateral.

The former had a loss ratio of 83 per cent while the latter had loss ratio of 65 per cent, sources say. The psychometric analysis gave Stanbic 83 percent loss ranking, meaning the bank suffered Sh15 billion loss in 2012/13. Altogether, the bank lost Sh31 billion.

Kariakoo traders took advantage of the bank's laxity in loans management, especially after learning that their loans were being managed from Kampala in Uganda. Stanbic officially announced a Sh14.9 billion loss during the quarter ending September 2013, according to its latest financial statement.

This is just a continuation of the bank's poor show which began last year and which sources say is a result of remote control of the institution's operations from its hub in South Africa and from Stanbic Uganda.

The Citizen has reliably established that when Standard Group wanted to introduce the Harvard-tailored product, the local team in Tanzania strongly rejected the move, citing serious risks that could eventually hurt the bank financially.

According to reliable sources within the Bank, Standard Group overruled the local managers and tasked the Stanbic Uganda to spearhead the entire loan process.

Our source said: "The head and respective teams under Stanbic Tanzania's personal and business banking department reported directly to South Africa with no reporting to the local CEO/MD. Business strategy for customers, products and credit loans were directly rolled out of Johannesburg with very little input from management of Stanbic Tanzania and any interference or resistance was treated as dissent and disciplinary action was taken."

The psychometric test was done out of Santiago in Chile. Traders did not need to have a bank account to access the loans while credit approval and booking of the loans was done out of Stanbic Uganda, with no input from Tanzania. The collection of the loans was also done out of Stanbic Uganda.

According to sources, there were no limits in place to monitor the ageing process of these loans that were issued through the Personal and Business Banking-a situation that resulted in misleading data.

The Citizen wrote to Stanbic management three times seeking a response to the claims, but the bank kept mum.

Witch-hunting begins

When Stanbic, which operated profitably in the past few years, abruptly became a loss-making entity because of its rush to introduce unsecured loans, the bank's headquarters embarked on a witch-hunt, according to reliable sources.

The losses have become a reason for mistrust, with headquarters trying to figure out who might have been behind the poor show. This has resulted in the transfer of former Managing Director Bashir Awale and the dismissal of some senior managers who worked closely with him.

Mr Awale will be remembered for running the bank profitably at some point in his seven-year tenure and for facilitating the closing of a $600 million amortisation private placement on behalf of Tanzania. He was in May this year reportedly transferred to Kenya to take up a new position as the Regional Investment Bank Executive for East Africa as well as Ethiopia and South Sudan.

It is not clear, though, why he did not take up his new position. His departure set off an exodus of staff and the sacking of senior managers believed to have been close to him during his tenure as the MD.

He told The Citizen last week: "I am no longer with the bank, but I hope one day the truth will come out. What pains me is the fact that those who questioned the unsecured loan scheme but were ignored are the ones being targeted today." He declined to give more details, saying that since he was no longer working with Stanbic, he was not in a position to disclose further financial details.

When The Citizen tried to get the bank's side of the story, Acting Managing Director Paul Omara said: "Stanbic Bank Tanzania does not divulge details of internal HR processes, in keeping with Standard Bank Group policy."

He neither admitted nor denied the numerous claims of remotely-controlling the management of the bank, specifically the personal and business banking department, from South Africa and Uganda but quipped: "Stanbic Bank Tanzania has stringent and robust processes in place to comply with the fiduciary and regulatory laws as set by the government of Tanzania".

With the loss going public as required by laws governing the banking sector in Tanzania, Mr Omara said the bank was doing all it could to return to profitability. One of the ways being employed, he said, is the injection of a $15 million capital from the parent company, the Standard Bank Group.

"Stanbic Bank Tanzania is to be restructured to return the business to profitability and has taken decisive action to improve the bank's performance. It received capital injection of Sh24 billion ($15 million) from its parent, Standard Bank Group, on 31 July 2013 to ensure smooth and stable operations of the bank," he said.

But he maintained his silence on pressing issues that are said to have turned the once profitable bank into a loss-making entity and triggered reshuffles within the management structures.

There are claims that in its heyday, the bank had only three expatriates on board but, following the huge loss in recent months, Stanbic has brought in about 20 expatriates in an attempt to turn around the bank.

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[Synthesizer]

Kampuni nyingi sana za nje zinadharau maoni ya wafanyakazi wazawa, ambao wanaijua nchi na mazingira ya biashara kuliko hao ma-TX wanaokuja na kulipwa mishahara ya juu sana tofauti na wazawa. Waache wapate hasara, serves them right.

 

[Chimunguru]

Ok sasa na connect the dots, niko nao hawa jamaa, nearly 2yrs sasa hawa jamaa wamesitisha loans kumbe wamepigwa na wajanja wa kkoo, hahaaaaa

 

[mpiga domo]

wamemfanyia fitna bashir..the guy was ril smart..ameitoa bank mbali..hawa waganda the new MD and his henchman team at the headquaters will run the bank to the grounds na hii policy yao ya ku'acquire profitable customers

 

[Super Handsome]

Ndo maana namuonaga ana kata laga pale rose garden..nilisikiaga hii issue kitambo sana...!

 

[Mlachake]

Hapo kwenye witch hunting ndio pananifanya nichukie kuajiriwa ajira.

 

[Sangarara]

Hao waliokuwa terminated ni akina nani? how safe are customers deposits? hizo funding wanazopata kutoka standard group ni reliable kiasi gani, will they be able to infuse additional money when more crystallized losses are uncovered? has BOT sent its AUDIT Team for stress testing its balance sheet?

 

[Janjaweed]

people will remember bashir sana pale.... waganda walidhani ni rahisi kurun ile bank

 

[qn of sheba]

Hahaaa waliwacheka sana Barclays sasa barclays wame recover sasa zamu yao

 

[Mbangaizaji]

people will remember bashir sana pale.... waganda walidhani ni rahisi kurun ile bank

Shida kubwa kwa sasa hivi kwa Stanbic ni kuwapa uongozi watu wa Uganda na Kenya ambao ndio waliosababisha hasara.Kufanya biashara ya benki Tanzania kama huna uhusiano mzuri na wadau(mashirika,taasisi na serikali)ni kupoteza wakati.Wataendelea kupata hasara wasijue nn kinaendelea.Kama kuna watu wwnatujisenti pale ni wakati sahihi wa kuviondoa maana hasara utaendelea sana pale.Makaburu si watu maana huwezi kuendesha benki vyema kwa kuondoa managementi yote iliokuwepo na kutegemea matx waendeshe benki.BoT wanatakiwa wafanye forensic audit kujiridhisha kama hii benki inauwezo kwa kukabiliana na hizo hasara za zaidi ya billion 30 na pia sababu gani iliifanya benki kuanzisha product za kiwendawazimu kama hizo huku local management ikiwa imepinga.Bila kusahau kwanini mikopo ilikuwa inatolewa na kuwa managed kutoka uganda je benki kuu walitoa baraka zao kwenywe mambo hayo.Standard Bank Group wanatakiwa kuwajibika kwenye hili.Halafu tabia ya kugoma kujibu hoja zilizoulizwa kwa nia njema na Citizen na managementi mpya ni utovu wa adabu na ufedhuli wa kiwango cha juu.Hatua za haraka zichukuliwe kunusuru hii benki.

 

[peri]

wanafanya biashara kwa kukariri, mfumo ulioleta manufaa nchi moja haimaanishi utafanikiwa nchi nyingine. Mazingira yana mchango mkubwa ktk biashara yoyote, benk nyingine zinapaswa kujifunza ktk hili.

 

[MTAZAMO]

Hawa walimchanganya bure Bashir sasa ndio wataheshimu wazawa.

Bashir ...just enjoy the show! endelea kukata lager zako taratiiiibu!!

 

[Mbangaizaji]

Benki Kuu ina jukumu la kuchukua hatua za uhakika kudhibiti hali hii ya mabenki ya ndani ya nchi kuendeshwa kwa remote kutoka nje.Ilishatokea Barclays na NbC
Hii inamaaniasha hamna corporate governance na maamuzi hayazingatii uelewa wa soko la ndani ya nchi ambao unatofautiana kati ya nchi na inaonyesha si bodi wala local management iliyo na maamuzi kuhusu uendeshwaji wa benki.

Hii ni hatari sana kwa uchumi ukizingatia hii ni kati ya benki kubwa 5 nchini.
Governor Ndullu amka pesa za wateja ziko katika hatari bila kusema kuhusu maamuzi mabaya ambayo hayakupata baraka za Regulator.Kwenye suala hili BoT lazima waamke otherwise sitoshangaa benki mojawapo kubwa kufa na kutesa wateja wenye vijisent vyao.Huwezi kuruhusu hasara ya kiasi hiki kwa maamuzu ya remote control.Mimi ningekuwa board member ningechukua maamuzi magumu ya kujiuzulu maana unakaa kwenye board bila meno wala maamuzi ila unakula posho 2 maamuzi South Africa.

 

[mpiga domo]

Hao waliokuwa terminated ni akina nani? how safe are customers deposits? hizo funding wanazopata kutoka standard group ni reliable kiasi gani, will they be able to infuse additional money when more crystallized losses are uncovered? has BOT sent its AUDIT Team for stress testing its balance sheet?

waliokuwa terminated mostly ni heads of sensitive departments kama operations, marketing, commercial and agriculture banking, human resource and the list goes on and on

 

[Sangarara]

waliokuwa terminated mostly ni heads of sensitive departments kama operations, marketing, commercial and agriculture banking, human resource and the list goes on and on

hizi departments zote mbona sioni connection yake na defaulters wa Kariakoo?

 

[Sangarara]

Benki Kuu ina jukumu la kuchukua hatua za uhakika kudhibiti hali hii ya mabenki ya ndani ya nchi kuendeshwa kwa remote kutoka nje.Ilishatokea Barclays na NbC
Hii inamaaniasha hamna corporate governance na maamuzi hayazingatii uelewa wa soko la ndani ya nchi ambao unatofautiana kati ya nchi na inaonyesha si bodi wala local management iliyo na maamuzi kuhusu uendeshwaji wa benki.

Hii ni hatari sana kwa uchumi ukizingatia hii ni kati ya benki kubwa 5 nchini.
Governor Ndullu amka pesa za wateja ziko katika hatari bila kusema kuhusu maamuzi mabaya ambayo hayakupata baraka za Regulator.Kwenye suala hili BoT lazima waamke otherwise sitoshangaa benki mojawapo kubwa kufa na kutesa wateja wenye vijisent vyao.Huwezi kuruhusu hasara ya kiasi hiki kwa maamuzu ya remote control.Mimi ningekuwa board member ningechukua maamuzi magumu ya kujiuzulu maana unakaa kwenye board bila meno wala maamuzi ila unakula posho 2 maamuzi South Africa.

Idara nyingi za serikali yetu hazitimizi majukumu yake vyema, Miezi michache iliyopita nilikwenda kuomba bank statements za mwaka 2009 pale standard chartered bank, nikiambiwa niandike barua sababu hizo zinatumwa kutoka kenya.

nikajiuliza
sheria yetu ya kodi inaelekeza nyaraka zote za mahesabu zihifadhiwe si kwa kipindi kinachopungua miaka mitano
sheria ya makampuni inaeleza zihifadhiwe si chini ya miaka saba

japo hazisemi lakini sidhani kama zinamaanisha zikahifadhiwe nje ya nchi.

haya mambo yanaeleweka wazi kabisa hasa na TRA lakini hakuna hatua zozote zinachukuliwa.

 

[mpiga domo]

hizi departments zote mbona sioni connection yake na defaulters wa Kariakoo?

"whitch hunting at work", most of them were close friends or rather allies to the former MD Bashir Awale. I guess they are tryin to cover up the mess because most of the people who are now being terminated together with the former MD are the one who rejected the Harvard invented loan product.

 

[Sangarara]

"whitch hunting at work", most of them were close friends or rather allies to the former MD Bashir Awale. I guess they are tryin to cover up the mess because most of the people who are now being terminated together with the former MD are the one who rejected the Harvard invented loan product.

So could it be that, they suffocated the strategy because it was being carried out by guys from uganda?

 

[mpiga domo]

So could it be that, they suffocated the strategy because it was being carried out by guys from uganda?

for many reasons the loan product was a failure before it was launched in tanzania, there was no way it was going to work in Tanzania and who better to see that than the people who are being terminated now, they knew the banking dynamics well in Tanzania more than the bureaucrats who were running that loan scheme from thousands of miles away.

 

[maroon7]

So could it be that, they suffocated the strategy because it was being carried out by guys from uganda?

I don't think so japo wao wanawezakuwa wanajiaminisha hivyo kwa sababu kwa namna yoyote ile mazingira ya sehemu husika ni muhimu sana kuzingatiwa kabla ya kuamua ku-undertake project yoyote ile...na sio lazima same project iwe successful everywhere ndio maana ingekua bora kuipotezea kwa TZ kama ilishatiliwa shaka na local management kwa kuwa wao wanajua zaidi mazingira wanayofanyia kazi na challenges they are facing..