Tanzania acquits business tycoon in $122M energy scam

By Kizito Makoye

DAR ES SALAAM, Tanzania (AA) - A prominent Tanzanian business tycoon who had been detained without bail since 2017 on charges of economic sabotage was set free Thursday as the state expressed no interest in continuing with the case.

James Rugemalira, managing director of VIP Engineering, and his co-accused Harbinder Singh Sethi, chairman of Pan African Power Solutions, were arrested in 2017 and charged with economic sabotage, forgery, impersonation, running a criminal syndicate and obtaining money by false pretense, occasioning the government a loss of $22,198,544 and 309 billion Tanzanian shillings ($133 million).

The prosecution alleged that such offences were committed in Tanzania, South Africa, Kenya and India.

Grace Mwanga, the state attorney, told a court in Tanzania’s port city of Dar es Salaam that the prosecution did not have any intention to proceed with the criminal case, which has been dragging on for nearly four years.

“We ask this court to release the accused, Rugemalira,” said Mwanga.

The high-profile corruption scandal, which involved the looting of $122 million from the Bank of Tanzania’s escrow account to facilitate fraudulent payments to offshore accounts disguised as payments for energy contracts, prompted foreign donors including the UK, Denmark and the World Bank to delay badly needed aid until the country took appropriate action to fight corruption.

According to the country’s parliamentary oversight committee, the money had been shared among public servants and people in the private sector.

The East African country, which is heavily reliant on hydroelectricity, has experienced power shortages caused by long periods of drought.

Sethi was released a month ago after paying 200 million Tanzanian shillings ($86,259) out of the 26 billion shillings ($11.2 million) he was ordered to pay under a plea bargain deal with the Director of Public Prosecutions.

The duo first appeared before a Dar es Salaam based court on June 19, 2017 facing 12 charges, including money laundering.

The corruption scandal had seen various high-profile government officials sacked or resign.