Why these CEOs are spending Christmas behind bars

26Dec 2018
By Financial Times Reporter
Dar es Salaam
Financial Times
Why these CEOs are spending Christmas behind bars
  • UNBAILABLE OFFENCE – One CEO, Akram Aziz, a sibling of business tycoon Rostam Aziz, was released only last week after spending almost two months in jail over allegations of money laundering, which is a much-dreaded criminal charge that has forced several

MORE than a dozen chief executive officers (CEOs) and business leaders in Tanzania are spending the year-end holiday season in jail.

James Rugemalira and Harbinder Sethi

These prominent business tycoons behind the infamous Independent Power Tanzania Limited (IPLT) scandal were charged with 350billion/- economic sabotage and money laundering charges at the Kisutu Resident Magistrate’s Court in June 2017.

The wealthy and erstwhile powerful executives have been forced to swap a life of luxury for the confinement and squalour of a jail cell in Dar es Salaam and elsewhere.

Some have spent months or even years behind bars in different circumstances and under varying criminal charges, despite not being actually convicted of any criminal offence.

But they have one thing in common -- they were all charged with the much-dreaded money laundering offence, which carries no possibility of bail for the accused person.

Once charged in a court of law, suspects alleged to have committed money laundering offences, are somewhat automatically denied bail and sent to remand prison where they shall remain behind bars until the hearing of their cases is concluded and the magistrate or judge delivers ruling.

According to the Anti-money Laundering Act of 2006, money laundering acts include, among many other things, converting, transferring, transporting or transmitting property for the purpose of concealing or disguising the illicit origin of the property.

Money laundering is not a boilable offence, which means accused persons are locked up until their cases are concluded, a process that could take several years.

Some legal analysts have roundly criticised the anti-money laundering legislation, saying it was denying accused persons their right of presumption of innocence until proven guilty by refusing bail.

“The presumption of innocence is a fundamental legal principle that says everybody is considered innocent unless proven guilty. All our laws have to reflect this very important legal principle,” a Dar es Salaam based lawyer, Nyaronyo Kicheere, told the Financial Times.

He warned that by denying accused persons their right to bail as a blanket rule, the Anti-money Laundering Act could potentially be abused to “fix certain people who are in wrong books with authorities.”

“Some people are maliciously prosecuted using that law and when they are acquitted by the court, they can hardly get compensated for spending years in jail without actually committing any crime,” Nyaronyo noted.

On his part, another Dar es Salaam-based lawyer, Juma Thomas, said apart from money laundering which has no bail, several people have been locked up in remand prison for a long time, simply because of delayed police investigations.

“There are many people whose criminal cases have been routinely adjourned countless times and they are still languishing in remand prison just because prosecutors have not completed their investigations,” he said.

Here are some of the most recognisable executives who are spending Christmas and New Yeay holidays in prison after being charged with money laundering offences:

James Rugemalira and Harbinder Sethi

These prominent business tycoons behind the infamous Independent Power Tanzania Limited (IPLT) scandal were charged with 350 billion/- economic sabotage and money laundering charges at the Kisutu Resident Magistrate’s Court in June 2017.

They have now spent at least 18 months in jail and counting after being denied bail due to money laundering charges against them.

Harry Kitilya

The former commissioner general of the Tanzania Revenue Authority (TRA) was jointly charged with money laundering along with two other suspects in April 2016.

The trio – Kitilya and ex-senior employees of Stanbic Bank Tanzania Sioi Solomon and Shose Sinare -- remains in prison more than two and a half years after they were charged with money laundering. The case is still ongoing in Dar es Salaam.

Deo Mwanyika, Asa Mwaipopo and Alex Lugendo

In October this year, Deo Mwanyika, the former Vice President of Corporate Affairs of Acacia Mining Plc was charged with several offences, including money laundering, along with the head of government relations at the country’s biggest gold miner, Alex Lugendo.

Acacia’s recently-appointed Managing Director, Asa Mwaipopo, was also joined in the case in the same months.
Like others charged with money laundering, the Tanzanian mining executives remain behind bars while prosecutors continue to investigate their alleged crimes.

Peter Noni and Dr Ringo Tenga

In November last year, four people were arraigned before the Kisutu Resident Magistrate’s Court in Dar es Salaam and were charged with multiple counts of fraud, money laundering and causing a loss of about 7 billion/- to the Tanzania Communications Regulatory Authority (TCRA).

The accused persons included Peter Noni, a former managing director of the state-run Tanzania Investment Bank (TIB) and a prominent lawyer and university lecturer, Dr Ringo Tenga. They were denied bail and remain in remand prison.

Football executives

Several Tanzanian football executives have also been charged in separate cases with a number of offences, including money laundering, and are being detained in jail pending the deamination of their cases.

They include former Tanzania Football Federation (TFF) president Jamal Malinzi and ex-Simba Sports Club president Evans Aveva.
Most of the money laundering cases against top CEOs in Tanzania have gathered momentum over the past three years, taking their cue from the government’s renewed commitment to fight corruption and tax evasion.

President John Magufuli set the tone publicly by declaring that while the rich and powerful were largely untouchable in previous administrations, no one would be above the law under his watch.

Sources close to the government told the Financial Times that more CEOs and business executives are expected to be charged with serious crimes, including economic sabotage, corruption, fraud, tax evasion and money laundering over the course of the coming year as the state steps up its anti-graft crusade in earnest.