Na huu ndiyo ukweli kuhusu Meremeta
Meremeta Gold, the firm that was paid a whopping Sh155 billion by the Bank of Tanzania in unclear circumstances in mid last year, was an offshore company, registered in United Kingdom in 1997, The Citizen can reveal today.
That means that chances of recovering the taxpayers' money and the necessary taxes up to the date it closed shop are negligible.
A senior Cabinet minister told The Citizen in Dar es Salaam yesterday that "since it was registered as an offshore company" it would be difficult to recover the billions it had been paid.
Speaking on condition of anonymity, the minister said: "First of all, I am surprised that an offshore company was allowed to operate in this country but the clear point is that any offshore company is untraceable."
Legal experts concurred, saying that it would be difficult for the Government to recover the Sh155billion, due to the tough protection accorded to such business entities.
An offshore company does not conduct substantial business in its country of incorporation. Such firms are sometimes known as non-resident companies.
But the Companies Act 212, states clearly that offshore company can only be registered and given a certificate of compliance after fulfilling certain conditions, including renunciation of its original registration.
The Act prohibits offshore companies from operating in Tanzania unless they change and indicate that they will not be protected by offshore registration procedures.
Strangely, the Government registered Meremeta Gold. Asked why the State entered into partnership with an offshore company, the Minister for Energy and Minerals, Mr William Ngeleja, said: "The Government wasn't aware until mid last year after the company went bankrupt."
And fresh details show that the company wasn't owned by Tanzania People's Defence Forces (TPDF) and the South African Army, as was alleged in 1997, when its existence became public.
The firm started as an army project managed jointly by TPDF and the South African Army, to mine and export gold, before becoming a ghost company that looted about Sh155 billion from the public coffers.
Contacted yesterday, the Minister for Defence, Dr Hussein Mwinyi, said: "I am not familiar with the issue because I wasn't in office during that period."
He asked The Citizen to send him written questions by this morning.
The amount stashed away by the defunct company can build 500 kilometres of tarmac road or 7,500 classrooms at the cost of Sh20 million for each class.
Meremeta, the Kiswahili word for glitter, will not be glittering when the defunct gold company scandal is raised in Parliament.
After the controversial Richmond tender and External Payments Arrears (EPA) scandals, opposition and ruling party MPs believe that Meremeta poses a serious threat to the integrity of previous regime and the current administration.
Musoma Rural MP Nimrod Mkono of CCM plans to table a private's member's motion to establish who the real owner of Meremeta Gold is and why was the firm paid billions of shillings after going bankrupt.
The details, which are part of an investigation report sent to the donor community recently by the opposition parties led by Chadema's Dr Willibrod Slaa, says that the defunct gold company was registered as an offshore company on August 19, 1997, and given a registration No. 3424504.
The reasons for the formation of offshore firms are privacy, asset protection, tax savings, lawsuit protection, flexible business laws and confidentiality
The opposition parties' report, which was made available to The Citizen, says that the company was then registered in Tanzania on October 3, 1997 as a branch of a foreign company and given a Certificate of Compliance No.32755.
On Sunday, our sister paper, Mwananchi Jumapili, quoted Mr Mkono as saying that the Government had been hesitating to reveal the real owners of the company that has cost taxpayers billions of shillings.
On Monday, speaking with The Citizen from the US: Mr Mkono said: "I have evidence that this ghost company pocketed a total of Sh181 billion and yet nobody wants to speak about it."
This amount is more than what CAG revealed in the 2005/6 auditing report.
"If we are investigating EPA and Richmond why not Meremeta," asked the Musoma Rural MP.
But the available details show that 50 per cent of the company's shares were owned by the Registrar of Treasury, and 50 per cent by South Africa's Trienex (PTY) Co Ltd.
Yesterday, Mr Ngeleja said: "The Government issued a statement on shareholders of Meremeta in June last year and clearly explained the profile of the company and why it had to be liquidated I'm working on the issue and I will get back to you later in the day,"
According to CAG report, BoT paid Meremeta debts amounting to Sh155 billion for unknown reasons.
The CAG revealed that a total of $118,396,460.36 was transferred to an unknown account of Nedbank Ltd of South Africa through HSB of New York, in 2005/6. The balance of $13,736,628.73 was paid to Tangold account with NBC Corporate Branch Dar-Es-Salaam.
According to available details, Tangold Ltd is a foreign registered company that was registered again as an offshore company in Mauritus (No C 205006121) dated 8 April 2005 and subsequently registered in Tanzania as a branch of foreign company with Certificate of Compliance No 55661 dated 20th February 2006.
During last year's budget session, former Energy and Minerals minister Nazir Karamagi defended the defunct company, saying it was a Government project, which was later replaced by Tangold Ltd.
While winding up his budget speech, Mr Karamagi told Parliament that Meremeta was jointly owned by the Government and South African firm called TRENEX PTY LTD.
The company was formed in order to buy gold from small scale miners in Lake zone regions, with a business plan of buying 300kg of gold a month. However, Mr Karamagi said it managed to buy only 40kgs.
I think this company has nothing to do with Mining gold. I think it has to do with training and modernizing our armed forces. That is training specia forces and so forth. Remember Kiwete once said, he wants to modernise our army? Now that is why it can not be disclosed by the government, I THINK!!!