The Tanzania government has thwarted an attempt to swindle $9 million out of liquidated shipping firm National Shipping Agencies Company Ltd (Nasaco) and its subsidiaries by pretending that it was required to pay the money as a settlement to a Swiss-based shipping line firm, Mediterranean Shipping Company SA, arising out of a court case that was actually closed a year ago.
The EastAfrican has been exclusively informed that investigators are now closing in on four senior government officials at the management level of the Consolidated Holding Corporation, the statutory corporation established by parliament for reorganisation and vesting of assets and liabilities of the liquidated and privatised state firms.
The four have been sent on compulsory leave.
This will be the first major financial scam in which the fraudsters were caught before they could actually siphon out government funds.Just last week, this newspaper reported a fraud in which an international syndicate successfully made away with $77 million from the accounts of the Tanzania Revenue Authority.
Initially, three management employees colluded in a prepared report to the Ministry of Finance and Economic Affairs claiming that there was a case still pending at the High Court that needed the government of Tanzania to pay Mediterranean Shipping for a court case that was closed in August 2008.
Minister for Finance and Economic Affairs Mustafa Mkulo told The EastAfrican in Dar es Salaam last week that four officials at the Consolidated Holding Corporation, a statutory corporate which took over from the Parastatal Sector Reform Commission, had been forced to go on leave in order to facilitate investigations.
Mr Mkulo said the government had wanted the Corporation to prepare a report on the financial position of the liquidated Nasaco to enable the Cabinet to make informed decisions on disposal of the parastatal firm.According to Mr Mkulo, after the Consolidated Holding Corporation handed its report to the government, details showed that Mediterranean Shipping Company of Switzerland had yet to be paid $9 million, spurring the government to order a thorough investigation that revealed the four officials had allegedly colluded to defraud the government.
“The government discovered that the report contained some inaccuracies because the $9 million (Tsh11.62 billion) which was what an international shipping line was demanding from the Nasaco had been included when the actual case had already been dismissed earlier this year by the Court of Appeal,” Mr Mkulo said.
Surprisingly, The EastAfrican has been informed that the CHC management never discussed the matter with the board nor did they include information from the liquidators on the case in question, including the outcome of the case.
A source in the government told The EastAfrican that on discovering the attempted fraud, the government summoned the CHC board and inquired how it had allowed the inclusion of the $9 million as being a valid claim. Thereafter the board undertook an investigation and discovered that indeed the report to the minister did contain inaccuracies.
The report said the case, number 250 of the year 2000 between Mediterranean Shipping Company of Geneva SA and Nasaco at the Court of Appeal, had greatly contributed to the slowing down of the Nasaco liquidation process.
In March, it was discovered that the case in question had been dismissed a year before, on August 14, 2008, even though the CHC management wanted to show the minister that the defunct company still owed the money to Mediterranean Shipping and the debt should be paid from the sale of the liquidated company’s assets.
“The government wouldn’t want to prejudice any future actions that may be taken against any official involved, but we are almost there,” said Mr Mkulo.
The National Shipping Agency Company was privatised amid protests from different stakeholders at the end of the 1990s.But even before Nasaco, was privatised, the government had issued licences to foreign shipping companies to operate in Tanzania.
This enthusiasm for opening up the shipping sector led some critics to say that Nasaco was no longer a serious candidate for privatisation.
SOURCE: http://www.theeastafrican.co.ke
/news/-/2558/660722/-/item/0/-/htd1h5/-/index.html
Monday, September 21, 2009
Thursday, September 17, 2009
Central banks issue proposals to limit impact of bank failure
Central bankers issued recommendations aimed at limiting the spillover impact when international banks are being wound up, in a bid to prevent a repeat of the financial crisis.
"The recommendations seek to promote more orderly resolution of cross-border banks to reduce systemic risk and help address the too-big-to-fail problem," said Nout Wellink, who heads the Basel Committee on Banking Supervision which is based at the Bank for International Settlements.
The BIS acts as a central bankers' central bank.
During the financial crisis, the collapse of international banks such as Lehman Brothers has had far-reaching impact beyond the bank's home base in the United States to several countries around the world.
Not only did it lead to a drying up of credit as wary banks stopped lending to each other, clients also lost assets linked to the failing financial institution.
Click here!
Drawing lessons from the Lehman Brothers' crisis, as well as those of Belgian-Dutch group Fortis, Icelandic bank Kaupthing and Belgian-French bank Dexia, the Basel Committee said national authorities need to be given strengthened powers to intervene early in future banking crises.
Banks should also develop "practical and credible plans" to facilitate a rapid winding up if that become necessary.
Further, mechanisms aimed at reducing the spillover impact of a bank failure must be strengthened.
For example, authorities should be given the powers to transfer financial contracts to a sound party to maintain continuity in case of a bank failure.
The recommendations drawn up by central bankers from developed and developing economies are open for consultation until December 31. - Sapa-AFP
"The recommendations seek to promote more orderly resolution of cross-border banks to reduce systemic risk and help address the too-big-to-fail problem," said Nout Wellink, who heads the Basel Committee on Banking Supervision which is based at the Bank for International Settlements.
The BIS acts as a central bankers' central bank.
During the financial crisis, the collapse of international banks such as Lehman Brothers has had far-reaching impact beyond the bank's home base in the United States to several countries around the world.
Not only did it lead to a drying up of credit as wary banks stopped lending to each other, clients also lost assets linked to the failing financial institution.
Click here!
Drawing lessons from the Lehman Brothers' crisis, as well as those of Belgian-Dutch group Fortis, Icelandic bank Kaupthing and Belgian-French bank Dexia, the Basel Committee said national authorities need to be given strengthened powers to intervene early in future banking crises.
Banks should also develop "practical and credible plans" to facilitate a rapid winding up if that become necessary.
Further, mechanisms aimed at reducing the spillover impact of a bank failure must be strengthened.
For example, authorities should be given the powers to transfer financial contracts to a sound party to maintain continuity in case of a bank failure.
The recommendations drawn up by central bankers from developed and developing economies are open for consultation until December 31. - Sapa-AFP
US bank executives 'subpoenaed'
Five current and former directors of Bank of America have been subpoenaed by the office of New York Attorney General Andrew Cuomo, according to sources.
They are likely to be asked how much they knew of Merrill Lynch's problems and bonuses when they agreed to buy it.
Bank of America saved Merrill Lynch from collapse a year ago.
Earlier this week, a US federal judge ruled the bank would have to go to trial to settle allegations it misled shareholders about bonus payments.
District Judge Jed Rakoff rejected the $33m (£20m) settlement between Bank of America and its regulator, the Securities and Exchange Commission.
Bail-out funds
Merrill executives were paid $3.6bn before the deal was closed, despite the bank's $27.6bn losses for 2008.
Bank of America has neither admitted nor denied the allegations of the Securities and Exchange Commission (SEC).
It was one of the biggest recipients of bail-out funds from the US taxpayer in 2008, needing capital injections at the height of the financial crisis.
It has been reported that Mr Cuomo's office is planning to file charges against executives at Bank of America for withholding information from shareholders.
They are likely to be asked how much they knew of Merrill Lynch's problems and bonuses when they agreed to buy it.
Bank of America saved Merrill Lynch from collapse a year ago.
Earlier this week, a US federal judge ruled the bank would have to go to trial to settle allegations it misled shareholders about bonus payments.
District Judge Jed Rakoff rejected the $33m (£20m) settlement between Bank of America and its regulator, the Securities and Exchange Commission.
Bail-out funds
Merrill executives were paid $3.6bn before the deal was closed, despite the bank's $27.6bn losses for 2008.
Bank of America has neither admitted nor denied the allegations of the Securities and Exchange Commission (SEC).
It was one of the biggest recipients of bail-out funds from the US taxpayer in 2008, needing capital injections at the height of the financial crisis.
It has been reported that Mr Cuomo's office is planning to file charges against executives at Bank of America for withholding information from shareholders.
How to Spot Counterfeit Money
It used to be that spotting a “good” counterfeit bill was impossible for ordinary people. If it was good enough to pass the “look and feel” test, then it was going to take an ultra-violet light or a magnetic ink detector. But for the past ten years, the Bureau of Engraving and Printing has been making bills that are easy to check.
The amount of counterfeit money in the US is low enough that most people feel safe taking money with barely a minimal check for counterfeits. Does it look and feel like money? Then it probably is. But have you ever gotten a bill where something—either the bank note or the person giving it to you—seemed a little off? Ever wished you could quickly check to see if it was good? Well, here’s how.
Step 1) Look and Feel
This is as far as most people go, and it’s good enough most of the time. US bank notes are printed on special paper that’s 75 percent cotton and 25 percent linen. The linen gives it an extra stiffness that’s distinctive. There are also red and blue fibers imbedded in the paper. Bank notes are printed with a process called “intaglio” that leaves ink on top of the paper, giving the money a distinctive texture. The printing is also very high quality, so the lines are sharp and clear, not broken, fuzzy, or blobby.
Step 2) Color-Shifting Ink
Bank notes bigger than the $5 bill use color-shifting ink to print the number showing the denomination in the lower-right-hand corner. Just look at the numbers head-on, and then from an angle. For genuine notes the color will shift (copper-to-green or green-to-black).
You can get this far pretty discreetly. The look and feel you’re checking automatically as soon as the bill is handed to you, and you can confirm the color-shifting ink in a quick glance. Going further will require that you hold the note up to the light, which is basically saying that you think you might have gotten counterfeit money. A lot of people hesitate to do that, but it’s the next step if you want to be sure.
Step 3) Watermark
All bills bigger than a $2 now have a watermark; hold the bill up to the light to see it. For the $10, $20, $50, and $100, the image matches the portrait. You can use the watermark to spot bills that have been bleached and reprinted with a higher denomination. The watermark is part of the paper and is visible from the rear of the note as well.
Step 4) Security Thread
All bills bigger than a $2 have a security thread running vertically through the bill. Like the watermark, you hold the bill up to the light to see it. The thread has text with the bill’s denomination and an image that is unique to that denomination. The different denominations have the threads in different places, again so you can spot bills that have been bleached and reprinted with a higher denomination. (The threads also glow different colors under ultraviolet light, but that’s not much help to ordinary folks.)
The amount of counterfeit money in the US is low enough that most people feel safe taking money with barely a minimal check for counterfeits. Does it look and feel like money? Then it probably is. But have you ever gotten a bill where something—either the bank note or the person giving it to you—seemed a little off? Ever wished you could quickly check to see if it was good? Well, here’s how.
Step 1) Look and Feel
This is as far as most people go, and it’s good enough most of the time. US bank notes are printed on special paper that’s 75 percent cotton and 25 percent linen. The linen gives it an extra stiffness that’s distinctive. There are also red and blue fibers imbedded in the paper. Bank notes are printed with a process called “intaglio” that leaves ink on top of the paper, giving the money a distinctive texture. The printing is also very high quality, so the lines are sharp and clear, not broken, fuzzy, or blobby.
Step 2) Color-Shifting Ink
Bank notes bigger than the $5 bill use color-shifting ink to print the number showing the denomination in the lower-right-hand corner. Just look at the numbers head-on, and then from an angle. For genuine notes the color will shift (copper-to-green or green-to-black).
You can get this far pretty discreetly. The look and feel you’re checking automatically as soon as the bill is handed to you, and you can confirm the color-shifting ink in a quick glance. Going further will require that you hold the note up to the light, which is basically saying that you think you might have gotten counterfeit money. A lot of people hesitate to do that, but it’s the next step if you want to be sure.
Step 3) Watermark
All bills bigger than a $2 now have a watermark; hold the bill up to the light to see it. For the $10, $20, $50, and $100, the image matches the portrait. You can use the watermark to spot bills that have been bleached and reprinted with a higher denomination. The watermark is part of the paper and is visible from the rear of the note as well.
Step 4) Security Thread
All bills bigger than a $2 have a security thread running vertically through the bill. Like the watermark, you hold the bill up to the light to see it. The thread has text with the bill’s denomination and an image that is unique to that denomination. The different denominations have the threads in different places, again so you can spot bills that have been bleached and reprinted with a higher denomination. (The threads also glow different colors under ultraviolet light, but that’s not much help to ordinary folks.)
KenGen gets approval to issue bond
THE Capital Markets Authority (CMA) in Kenya has approved KenGen's information memorandum, giving it a green light to raise Sh15 billion through the public infrastructure bond offer (PIBO).
The power distributor's managing director, Mr Eddy Njoroge, said he was delighted the organisation had been given the go-ahead to issue the bond. "Plans are on course to bring the bond to the market, in an effort to access funds to finance our capacity expansion programme," Mr Njoroge said.
He added that the details of the KenGen PIBO, which is expected to give both institutional and retail investors an opportunity to participate, will be unveiled in due course. The MD observed that there is a growing appetite for long-term debt instruments, which the company would like to leverage on to finance investments in additional power generation capacity.
KenGen's decision to seek funds from the debt capital market is a break from the past, where the company relied heavily on development financial institutions to finance its power generation projects.
"The debt capital market gives KenGen an opportunity to raise funds to finance our capital expenditure in a flexible manner, while allowing Kenyans to participate in infrastructural development, through an attractive investment opportunity," he said.
The investment in additional power generation capacity through the bond, is part of KenGen's five-year strategy of increasing its capacity by 500 megawatts to stabilise the power situation in Kenya. A third power generating plant at Kipevu, Mombasa, estimated to cost 10 million euros (Sh1.05 billion) is one of the projects expected to benefit from the bond.
The plant is estimated to generate 120 megawatts of electricity, which will be injected into the national grid to boost electricity supply."This will enable us continue with our critical role of ensuring that there is additional capacity to cope with the rising demand, anticipated at eight per cent annually.
Investment in additional generation capacity will not only help the country cope with additional demand, but also the power demand associated with the implementation of Vision 2030," Mr Njoroge added.
The transaction team for the bond comprises: KPMG as the financial advisors, Standard Chartered Bank the lead arranger, and Standard Investment Bank as the lead sponsoring broker.
Other members of the team are: Hamilton Harrison & Mathews as the legal advisors, PWC as the reporting accountants, and Ernst & Young as the auditors. Lowe ScanAd and Ogilvy PR are handling advertising and communications.
The power distributor's managing director, Mr Eddy Njoroge, said he was delighted the organisation had been given the go-ahead to issue the bond. "Plans are on course to bring the bond to the market, in an effort to access funds to finance our capacity expansion programme," Mr Njoroge said.
He added that the details of the KenGen PIBO, which is expected to give both institutional and retail investors an opportunity to participate, will be unveiled in due course. The MD observed that there is a growing appetite for long-term debt instruments, which the company would like to leverage on to finance investments in additional power generation capacity.
KenGen's decision to seek funds from the debt capital market is a break from the past, where the company relied heavily on development financial institutions to finance its power generation projects.
"The debt capital market gives KenGen an opportunity to raise funds to finance our capital expenditure in a flexible manner, while allowing Kenyans to participate in infrastructural development, through an attractive investment opportunity," he said.
The investment in additional power generation capacity through the bond, is part of KenGen's five-year strategy of increasing its capacity by 500 megawatts to stabilise the power situation in Kenya. A third power generating plant at Kipevu, Mombasa, estimated to cost 10 million euros (Sh1.05 billion) is one of the projects expected to benefit from the bond.
The plant is estimated to generate 120 megawatts of electricity, which will be injected into the national grid to boost electricity supply."This will enable us continue with our critical role of ensuring that there is additional capacity to cope with the rising demand, anticipated at eight per cent annually.
Investment in additional generation capacity will not only help the country cope with additional demand, but also the power demand associated with the implementation of Vision 2030," Mr Njoroge added.
The transaction team for the bond comprises: KPMG as the financial advisors, Standard Chartered Bank the lead arranger, and Standard Investment Bank as the lead sponsoring broker.
Other members of the team are: Hamilton Harrison & Mathews as the legal advisors, PWC as the reporting accountants, and Ernst & Young as the auditors. Lowe ScanAd and Ogilvy PR are handling advertising and communications.
TZS-FX INDEXES
A comparison of the movements in the
Tanzanian Shilling against major foreign
currencies namely the US Dollar, the Pound
Sterling and the Euro reveal that the US Dollar
has replaced the other two currencies as the safe
haven for currency hedging in Tanzania.
During the first 2 quarters of the year 2009 the
U.S. Dollar appreciated in value against the local
currency whereas the Pound Sterling and the
Euro depreciated. In the recent days the
Tanzanian Shilling has appreciated against the
greenback and raked in gains to recover some of
its losses. Analysts forecast that the Tanzanian
Shilling will close the year 2009 at around
TZS2,280.00 to TZS3,000.00 and better than it
begun the year.
Although the strength in the local currency
against the world’s trading currency is good for
the local economy in terms of inflation, it is
feared that this may stifle exports to foreign
nations as Tanzanian commodities and goods
become more expensive.
In another comparison, the prices of companies
listed on the Dar es Salaam Stock Exchange as
well as Kenya and Ugandan exchanges show that
prices differ for the same stock in different
markets. The share price of East African Breweries
Limited (EABL) in the Kenya capital market trades
at 8.7% higher at Tanzanian Shilling equivalent of
TZS2,501.25 on Nairobi Stock Exchange compared
to TZS2,300.00 in Tanzania on the DSE. Similarly,
the share price in the Uganda capital market was
8.3% higher at TZS2,491.02 Uganda Shillings
equivalent. However, the share price of Jubilee
Holdings Limited (JHL) and Kenya Airways (KA)
were significantly more expensive in the
Tanzanian capital market than in Kenya and
Uganda. JHL was trading at 66.7% lower in Kenya
and Uganda. Similarly, prices for Kenya Airways
were trading at 74.7% lower in the Kenya and
Uganda capital markets.
Information flow among investors is one of the
reasons that cause the divergence in the share
price of the same stock on different markets.
Therefore, there is lack of information flow in the
Tanzanian market.
Source: Kareem Capital
Tanzanian Shilling against major foreign
currencies namely the US Dollar, the Pound
Sterling and the Euro reveal that the US Dollar
has replaced the other two currencies as the safe
haven for currency hedging in Tanzania.
During the first 2 quarters of the year 2009 the
U.S. Dollar appreciated in value against the local
currency whereas the Pound Sterling and the
Euro depreciated. In the recent days the
Tanzanian Shilling has appreciated against the
greenback and raked in gains to recover some of
its losses. Analysts forecast that the Tanzanian
Shilling will close the year 2009 at around
TZS2,280.00 to TZS3,000.00 and better than it
begun the year.
Although the strength in the local currency
against the world’s trading currency is good for
the local economy in terms of inflation, it is
feared that this may stifle exports to foreign
nations as Tanzanian commodities and goods
become more expensive.
In another comparison, the prices of companies
listed on the Dar es Salaam Stock Exchange as
well as Kenya and Ugandan exchanges show that
prices differ for the same stock in different
markets. The share price of East African Breweries
Limited (EABL) in the Kenya capital market trades
at 8.7% higher at Tanzanian Shilling equivalent of
TZS2,501.25 on Nairobi Stock Exchange compared
to TZS2,300.00 in Tanzania on the DSE. Similarly,
the share price in the Uganda capital market was
8.3% higher at TZS2,491.02 Uganda Shillings
equivalent. However, the share price of Jubilee
Holdings Limited (JHL) and Kenya Airways (KA)
were significantly more expensive in the
Tanzanian capital market than in Kenya and
Uganda. JHL was trading at 66.7% lower in Kenya
and Uganda. Similarly, prices for Kenya Airways
were trading at 74.7% lower in the Kenya and
Uganda capital markets.
Information flow among investors is one of the
reasons that cause the divergence in the share
price of the same stock on different markets.
Therefore, there is lack of information flow in the
Tanzanian market.
Source: Kareem Capital
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