Take looters to court or forget aid, donors tell Dar By JOSEPH MWAMUNYANGE Special Correspondent THE EAST AFRICAN Tanzania government is under pressure to turn the screw on firms and individuals that defrauded the central bank through receipt of dubious payments. Already the government has shown bank of Tanzania Governor Daudi Balali the door, but donors are now demanding legal action against those implicated, and threatening to freeze aid. One way for Tanzania to move ahead on this is to join hands with governments such as the United States, Italy, South Africa, United Arabs Emirate, Switzerland and United Kingdom to freeze the money deposited in Swiss banks. Chief Secretary in the President's Office Philemon Luhanjo told The EastAfrican that the government has directed the Attorney General to lead a team comprising the Inspector General of Police and the Director of Criminal Investigation (DCI) and Director General of the Prevention and Combating of Corruption Bureau in taking action against individuals and phantom companies that illegally benefited from the External Payment Arrears (EPA) account. Mr Balali's former deputy, Dr Benno Ndulu, was appointed the governor while the board met to discuss how to deal with those implicated. President Jakaya Kikwete has already directed the AG and his team to use all powers vested in them to bring to book all those involved within six months. Mr Kikwete said that assets belonging to the accused would be frozen and confiscated and that they would be prosecuted. Some of the companies mentioned belong to individuals with strong connections with the ruling party and government, but insiders have told The EastAfrican that "Nobody will be spared if and when they are found to have illegally benefited from the EPA funds." The government said that more than $133 million was improperly paid to 22 local firms through the Bank of Tanzania EPA account during the period 2005/06. According to special audit findings, 13 out of the 22 firms were paid $90 million by using forged documents. These include Bencon International Ltd, VB & Associates, Bina Resorts, Venus Hotel and Njake Hotel & Tours Ltd. Others are Maltan Mining Company, Money Planners & Consultants, Bora Hotels & Apartment, B.V. Holdings, Ndovu Soaps, Navy Cut Tobacco, Changanyikeni Residential Complex, and Kagoda Agriculture Ltd. A further nine firms received $42 million for which there was no documentation of why they were paid. These were G&T International, Excellent Services Ltd, Mibale Farm, Liquidity Service Ltd, Clayton Marketing, Rashtas Ltd, Malegesi Law Chambers, Kiloloma and Brothers and Karnel Ltd. The audit further revealed that two companies' registration documents were missing from the Business Registration and Licensing Authority. These were Rashtas (T) Ltd and G&T International. Mid last year Minister for Finance Zakia Meghji told The EastAfrican that the government would undertake an audit at the central bank. Ms. Meghji had said that the findings by external auditors would be made public as a sign of transparency. In the notice issued by the Minister, she had said, "The government has been informed of an alleged impropriety in the management of external commercial debt account at the bank of Tanzania. "Given the seriousness of the allegation, the government has asked the Controller and Auditor General to appoint an independent auditor to conduct a special audit, and report results of the audit to the government," she said. Originally, Deloitte and Touche, former auditors of the Bank of Tanzania, had alerted the bank's top brass, only to have their contract terminated. The US embassy in Dar es Salaam welcomed the exit of the governor of the Bank of Tanzania as well as the fact that the government ordered a prompt investigation.