Questions raised over $180m Tanzania cashew nut deal! Hapa kuna game inachezwa


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Shadowy firm at the centre of $180m nuts deal
SATURDAY FEBRUARY 9 2019

Tanzania's Director of Cereals and Produce

Tanzania's Director of Cereals and Produce Board, Dr Hussein Mansoor (left) and Kenya's Indopower Solutions CEO Mr Brian Mutembei sign the 100,000 tonnes of cashewnuts sale deal at the EAC in Arusha on January 30, 2019.

Looking on are (from left) Minister for Industries and Trade, Joseph Kakunda; Minister for Constitutional and Legal Affairs, Prof Palamagamba Kabudi; deputy Minister for Agriculture, Dr Innocent Bashungwa; and Kenya's ambassador o Tanzania Mr Dan Kazungu.

In Summary
Cashewnut farming has in recent years become a thorn in the farmers’ side, its market having been infiltrated by brokers.
Govt set out to find a bulk buyer for the more than 200,000 tonnes of cashewnuts it had collected from the farmers.

That search apparently identified the Kenyan company, Indo Power. Its CEO told The EastAfrican the firm is a commodity trader, dealing in coffee and chicken, alcohol importation and wholesale petroleum products sale. Everything but cashewnuts.

By ALLAN OLINGO
More by this Author

Last week’s announcement that Tanzania had struck a $180 million deal to sell 100,000 tonnes of its cashewnut stockpile to a Kenyan company, Indo Power Solutions, was perhaps the best news that the farmers, who had earlier surrendered their crop to the state, received in years.

Cashewnut farming has in recent years become a thorn in the farmers’ side, its market having been infiltrated by brokers bent on squeezing every cent out of the trade as they increased their margins — setting the farmers’ earnings on a downward slide.

Tanzanian President John Magufuli had waded into the affair with a directive that threw all private cashewnut buyers out of the market in favour of his government, promising the farmers better earnings for their produce.

But shortly thereafter, the Tanzanian government, which had earlier promised to process the nuts and sell the finished product at a premium to increase the farmers’ earnings, appeared to have changed tack.

It set out to find a bulk buyer for the more than 200,000 tonnes of cashewnuts it had collected from the farmers, in what looked like an international invitation for bids.

That search apparently identified the Kenyan company, Indo Power, and the deal documents were quickly prepared for signing on the sidelines of the recent East African Community summit in Arusha, Tanzania on January 30.

Hussein Mansour, the Cereals and Other Produce Board director and Indo Power’s chief executive Brian Mutembei signed the deal at a ceremony attended by Tanzania’s Minister for Justice and Constitutional Affairs Palamagamba Kabudi, Industry and Trade Minister Joseph Kakunda, Bank of Tanzania Governor Florens Luoga, and Kenya’s High Commissioner to Tanzania Dan Kazungu.

'Indo who?'

But while Tanzanian officials and farmers found relief in the fact that they had finally found a buyer at what was deemed the fairest price possible in the marketplace, across the border in Nairobi questions immediately arose over the identity of the firm at the centre of the transaction.

“Indo who?” …was the common question on many Kenyan lips on hearing that the little-known company had pulled through a $180 million deal in Arusha.

Since then, questions have continued to be asked about the multibillion-shilling deal, especially coming at a time when Kenya is in the middle of a crusade to clean up its financial services sector that has more recently been discredited by the flow of millions of suspect funds.

Official registration documents show that Indo Power is a two-year old firm based in Thika town on the outskirts of Nairobi that was not known to have transacted any deals worth more than $10 million. Its owners are virtually unknown in Kenya’s big business community and its chief executive is better known in political deal making circles.

The EastAfrican investigations, including a search at the Registrar of Companies, found that Indo Power, which was registered in October 2016, claims to have offices in Indo House’s “Ground Floor, Room 6, Kisii Road, Thika.” Its directors, Joyce Waithira Gatoho Muigai and Alice Wanjiku Gatoho, jointly own 1,000 shares with a nominal share capital of Ksh100,000 ($1,000).

Mr Mutembei told The EastAfrican this week that the company was registered in 2008 and incorporated in 2016 and the directors are his mother and his wife.

The EastAfrican could, however, not locate Indo House in Thika.

Mr Mutembei says the firm is a commodity trader, dealing in coffee and chicken, alcohol importation and wholesale petroleum products sale.
Everything but cashewnuts.

Due diligence

It was not clear if the Tanzanian government had conducted due diligence on the company before inking the multimillion-dollar deal, whose proceeds are expected to be paid to the Bank of Tanzania within a week of the signing.

The presence of the Kenyan envoy at the deal signing appeared to signal Nairobi’s endorsement. Mr Kazungu defended his role in the deal, which many observers have described as curious, telling The EastAfrican that the embassy in Dar es Salaam was expected to facilitate the talks between the investor and the Tanzanian government. He, however, would not divulge details of the deal.

“We attended the signing of the deal because that was part of the economic diplomacy, which the mission is obligated to support. The fact that Tanzania is a grower should interest its neighbours and, as a mission, we are happy to see a Kenyan company clinch this deal. It is in our interest to nurture relations, including trade between the two countries. However, I cannot go into the specifics of the deal. I would advise you to reach out to Brian for that,” Mr Kazungu said.

Indo Power’s latest success comes only months after the Magufuli administration rejected the initial bid to purchase the cashewnuts. Shortly thereafter, the Tanzanian leader ordered the army to mop up the crop and truck it to depots to await sale.

In Kenya, doubts have continued to be raised about the ability of Indo Power to finance such a massive deal, with analysts pointing to the fact that the little-known firm may have merely acted as a broker for a third party.

It has not been lost on keen observers that a firm that is outward looking and active in international trade has no online presence. Official registration records also indicate that Indo Power has no bankers, no lawyers, no auditors, and no company secretary.

Mr Mutembei however reckoned that “the company has expertise in connecting Tanzania with the buyers of the produce,” a pointer to the fact that it may have merely acted as a broker.

So, who is behind it and where is the money coming from? Which banks would finance such a mega deal?

Financing the deal

Sources in Kenya’s financial services sector expressed doubts that this deal would be financed by a Kenyan bank, given the shadowy nature of the firm.

The country’s stringent financial reporting and anti-money laundering regulations would pose serious hurdles to the deal.

Mr Mutembei admitted that the money is not coming from Kenya, indicating that Indo Power had “presented a letter of credit for the total amount to the Tanzanian government as required in the agreement.”

“This LC was from international banks, and this credit line will make the purchase successful. So, the money isn’t going to be coming from Kenya’s financial system. I cannot name the banks that offered these LCs for confidentiality reasons,” he said.
 
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Tanzania will also sell other tonnes of nuts to our friends in Turkey
 
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It has not been lost on keen observers that a firm that is outward looking and active in international trade has no online presence. Official registration records also indicate that Indo Power has no bankers, no lawyers, no auditors, and no company secretary...... genuine concerns raised by the author..... Hapa kuna mtu anasafisha pesa {money laundering}
 
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Joyce Waithera Gatoho Muigai, Alice Wanjiku Gatoho ndio wamiliki(directors) wa kampuni iliyonunua korosho, Indo-Power Solutions. Inamaanisha kwamba ni family business? CEO mpiga dili Brian Mutembei naye ndio nani haswa kwenye kampuni hii na kwanini ofisi zao ambazo wanasema zipo Thika hazipatikani? Hapa kuna kauvundo flani na DPP Noordin Haji hatachelewa kufichua kila kitu. Pole kwa watani wetu, sasa hivi Kenya DPP Noordin na vikosi vyake vinawaandama wakwepa kodi na mafisadi kama mburukenge.
 
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Joyce Waithera Gatoho Muigai, Alice Wanjiku Gatoho ndio wamiliki(directors) wa kampuni iliyonunua korosho, Indo-Power Solutions. Inamaanisha kwamba ni family business? CEO mpiga dili Brian Mutembei naye ndio nani haswa kwenye kampuni hii na kwanini ofisi zao ambazo wanasema zipo Thika hazipatikani? Hapa kuna kauvundo flani na DPP Noordin Haji hatachelewa kufichua kila kitu. Pole kwa watani wetu, sasa hivi Kenya DPP Noordin na vikosi vyake vinawaandama wakwepa kodi na mafisadi kama mburukenge.
Just imagine the kind of KYC ( know your client due diligence) that a company does for even a kshs 100m deal. Then wewe ukuje na Usd 180m.... no bank account, no lawyers, no company secretary, no office, no auditors.....and the deal still goes through.... I feel there is more than meets the eye!!!
 
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pingli-nywee

pingli-nywee

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Just imagine the kind of KYC ( know your client due diligence) that a company does for even a kshs 100m deal. Then wewe ukuje na Usd 180m.... no bank account, no lawyers, no company secretary, no office, no auditors.....and the deal still goes through.... I feel there is more than meets the eye!!!
Kweli kabisa, tena zaidi ya yote muuzaji kwenye dili hiyo ni GoT, serikali!
 
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we are trying to be nyang'au, after five years will be at same level with real nyang'au
Kweli kabisa, tena zaidi ya yote muuzaji kwenye dili hiyo ni GoT, serikali![/QUOTE
 
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we are trying to be nyang'au, after five years will be at same level with real nyang'au
Hujaelewa point yangu. Hamkufanya 'due diligence' mkajua mpo kwenye biashara na nani. Kuna viashiria vyote kwamba kampuni mlioingia kwenye mkataba nayo ni kampuni hewa ambayo kazi yake ni ufujaji wa hela tu. Hela zilizopatikana kwa njia za kifisadi. Mafisadi na wakwepa kodi Kenya sasa hivi wamebanwa na wanatafuta njia za 'kuosha' hela zao za wizi.
 
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mwaswast

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Kale ka 1.5 trillion kamepata njia ya kusafishwa.
 
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lwiva

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Kwahiyo sisi inatuhusu nini mbona nyinyi dhahabu inayo ibiwa tz inakuja kwenu kuwanufaisha nasisi hatuna tatizo kama mkenya anaiba Kenya na kujakutumia tz
Hujaelewa point yangu. Hamkufanya due dilligence mkajua mpo kwenye biashara na nani. Kuna viashiria vyote kwamba kampuni mlioingia kwenye mkataba nayo ni kampuni hewa ambayo kazi yake ni ufujaji wa hela tu. Hela zilizopatikana kwa njia za kifisadi. Mafisadi na wakwepa kodi Kenya sasa hivi wamebanwa na wanatafuta njia za 'kuosha' hela zao za wizi.
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Mkikuyu- Akili timamu

Mkikuyu- Akili timamu

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Hujaelewa point yangu. Hamkufanya due dilligence mkajua mpo kwenye biashara na nani. Kuna viashiria vyote kwamba kampuni mlioingia kwenye mkataba nayo ni kampuni hewa ambayo kazi yake ni ufujaji wa hela tu. Hela zilizopatikana kwa njia za kifisadi. Mafisadi na wakwepa kodi Kenya sasa hivi wamebanwa na wanatafuta njia za 'kuosha' hela zao za wizi.
Muwache umbea na taarab..Wewe kwako kajiado mteja akija na pesa cash anunue mbuzi zako unafuatilia anaishi wapi, bibi yake ni nani na anawatoto wangapi?
Haja yako ni kupokea pesa taslim sio kuchunga boma za wengine..Inaonekana haujafanya biashara wewe
 
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Muwache umbea na taarab..Wewe kwako kajiado mteja akija na pesa cash anunue mbuzi zako unafuatilia anaishi wapi, bibi yake ni nani na anawatoto wangapi?
Haja yako ni kupokea pesa taslim sio kuchunga boma za wengine..Inaonekana haujafanya biashara wewe
Serikali haifanyi/Haitakiwi kufanya biashara kihuni namna hiyo.

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mwaswast

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Serikali ya Tz ni bure kabisa.
 

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