Eurobond facilitation fee 1.4, not 2.4pc, Mkulo tells court

FORMER Cabinet Minister Mustafa Mkulo yesterday told the High Court’s Economic, Corruption and Organized Crime Division that the facilitation fees for 550 million US dollars loan the government requested from Standard Bank was 1.4 per cent and not 2.4 per cent.

The ex-Minister for Finance between February 13, 2007 and May 7, 2012 gave such position when giving evidence in the 12bn/- trial of ex-Commissioner General of Tanzania Revenue Authority (TRA) Harry Kitilya and his coaccused persons.

In one of the counts, the prosecution alleges that between May 1, 2012 and June 1, 2015 in Dar es Salaam, willfully, all accused raised facilitation fee of the loan amounting to 600 million US dollars from 1.4 to 2.4 per cent, thereby causing the government to suffer a pecuniary loss of six million US dollars.

Led by Senior State Attorney Pius Hilla, the first prosecution witness told Judge Immaculata Banzi that the loan they had requested was to be provided in two installments in which the first payment was 250 million US dollars and the second part would be 300 million US dollars.

According to him, the loan was from Standard Bank with interest rate of 6.5 per cent and the facilitation fee was 1.4 per cent of the loan and was required to be made available in 2012.

“The process had not completed and so the loan could not be obtained. When experts reviewed the proposals advised the loan to wait until another 2012/2013 financial year.

I retired in May 2012,” the former minister explained.

He went in accounting, however, that in 2016 after he had left the Ministry of Finance, he was called by the Prevention and Combating of Corruption Bureau (PCCB) where he was asked to give details about the loan process. “I told them. I was asked questions if I knew the loan application process.

They (PCCB) told me that the loan provided was 600 million US dollars with 2.4 per cent facilitation fees. Until I left the Ministry the loan process had not been completed. I did not know anything what happened thereafter,” he said.

The ex-minister insisted that at the time the facilitation fee was 1.4 per cent of the total loan requested of 550 million US dollars.

He also pointed out that there were no other independent advisors during the loan application process apart from those from the government.

Other attorneys who appeared for the prosecution in the yesterday’s proceedings were Principal State Attorneys Osward Tibabyekomya and Hashim Ngole.

The Advocates are Dr Masumbuko Lamwai, Majura Magafu, Jeremiah Mtobesya, Zahra Sanare, Mwanaidi Maajaa, Godwin Nyaisa and Charles Alex.

Other accused into trial are Shose Sinare, who was former Head of Investment Banking at Stanbic Bank, Sioi Solomon, ex- Chief Legal Counsel to the bank, Bedason Shallanda, who is Commissioner for Policy Analysis-Debt with the Ministry of Finance and his Assistant Alfred Misana.

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