HII NDO TRA BWANA:TRA hands over seized cargo to suspect dealers

In a rare show of scandalous dealings, the Tanzania Revenue Authority (TRA) has sold back to the owners a seized consignment of dry hides worth over $160m through a ‘well organized’ auction, The Guardian can reveal.

TRA Acting Commissioner General, Rished Bade

While TRA was investigating SAK International, a company owned by a group of Pakistani nationals for involvement in the illegal exportation of the raw hides, the Pakistanis are said to have hoodwinked TRA to get back the goods through another company name.

Amaal Investment, the company that bought the hides at the auction on 24 January, this year is allegedly owned by one Amaal, daughter of Asim Mahmood, one of the SAK International directors.

The three containers weighing 80 tons of dry hides were worth some Sh160 million in November last year when they were detained at the port, but were subsequently sold off at Sh50 million during the auction. However, The Guardian has learnt that the buyers paid just half of that -- about Sh25 million.

The revenue body also contravened its own regulations by selling the goods to a company that did not meet those requirements.

Through a media advertisement on 20 January, this year, TRA laid five conditions for sale of the consignment. The first requirement reads, “ All bidders must be licensed by the Ministry of Livestock and Fisheries Development for export of hides, skins and leather for the year 2013/2014.”

The Guardian confirmed at the ministry that the said company is not licensed as indicated above; it only holds a business licence issued by the Ilala Municipal Council. “This licence does not allow them to export anything outside the country,” said our source who declined to be named.

The source further said that the company had applied for a licence from the ministry just last December – which hadn’t been   approved at the time of auction.

A lot of controversy has since clouded the disposal of the containers from the time they were seized in November last year. For s start, the owners of the goods still remain unknown, raising questions among various stakeholders.

But TRA acting Commissioner General Rished Bade said the Authority had directed the police to carry investigations into the saga in effort to reveal people behind apparent moves to evade tax.

This reporter reached him on phone because he had promised two weeks ago to give more clarification on the matter after getting a report -- which he had apparently ordered his subordinates to compile.

But this top man at TRA sounded aggrieved by this reporter’s efforts to follow-up the matter, and said he had not received the report yet.

 “The report isn’t ready yet … but as you know we have so many things to do … not just follow-ups on the hides issues,” he opined. Somewhat blaming this reporter for sticking “on just one issue every week.”

Mr Bide asked: “Do you have to write about TRA every week … more so on this issue of dry hides ... or is this the only thing you can do?”

It was at this point that this reporter pointed out that various stakeholders were dissatisfied with the way the matter had been handled.

When asked about the new developments of the company that bought the hides, he said he would direct the commissioner for customs and excise to do the necessary follow-up.

What actually transpired

On November 11, 2013 the customs department seized three containers of under-declared raw hides slated for export, which TRA then valued at $150,000, but the traders had indicated they were worth just $84,000.

Several weeks after the seizure, customs and excise deputy commissioner Patrick Kisaka told this reporter that the authority had failed to identify the owners of the seized containers, and that the authority would auction the goods.

Kisaka also said the raw hides worth Sh163.5m (about $1,000,000) were then being held at the customs warehouse awaiting public auction any time last month.

However, this paper learnt that SAK International Limited, the company under investigation for evading tax in the exportation of the said hides, had then offered the highest bid at auction.

Our investigations earlier revealed that SAK directors had flown to Pakistan just days after the goods were detained by the customs officials last November.

But on December 22, last year, they sent one of their young brothers back to Tanzania to buy the goods.

During inspections before the auction, TRA official Manjale Masare who supervised the exercise publicly announced that SAK International or its affiliates would not be allowed to participate in the auction -- because the company was under investigation.

“SAK International and its partners are automatically disqualified in this process … the investigation is still underway,” he said, adding that allowing them to do so would contravene ethics. But it soon emerged that after coming back into the country, the SAK International official -- through an offer of Sh900 apiece – was declared the highest bidder.

After pressure and complains from other stakeholders, TRA changed course, saying it wouldn’t sell the goods to the highest bidder -- the company under investigation in this case – which prompted several meetings among stakeholders.

During a meeting on December 31, last year, representatives from the Tanzania Tanners Association (TTA), TRA and the Ministry of Livestock and Fisheries Development, agreed that the confiscated hides be donated to the prisons department.

This decision was later overruled by acting Commissioner General Rished Bade, who told The Guardian thus: “I stopped the process after realizing that some people with ill intentions wanted to take the hides away from the prisons department.”

Unanswered questions

Three months after the seizure, the people behind the consignment still remain unknown -- neither is the clearing agent who handled the consignment held responsible, nor has the shipping line, Maersk, which leased the containers to the exporters, come out to throw some light over the saga – even though its containers were used in the process.

SOURCE: THE GUARDIAN