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Nigeria, South Africa At War Over Seized $9.3 Million Cash

September 22, 2014 Leave a comment

360News

September 19,  2014

Detectives in South Africa have rejected Nigerian government’s explanations of the purpose of the $9.3 million cash seized from two Nigerians and an Israeli as “flawed and riddled with discrepancies”.

The suspects told South African authorities that the money was meant for the procurement of arms for Nigerian intelligence agencies.

“… Although various explanations about the money were given to the investigating officer, these explanations were flawed and riddled with discrepancies,” the South African prosecution agency said in a statement sent to this newspaper.

The jet used to ferry the money is owned by Ayo Oritsejafor, who heads the Christian Association of Nigeria, CAN.
Mr. Oritsejafor, a cleric, said he is not aware of the arms deal. He said although he owns the aircraft, it was managed by another company, Eagle Air Company, which in turn, leased the jet to a third party, Green Coast Produce Limited.

The Nigerian government in an unsigned statement, Tuesday, said it has provided South African authorities with documents and receipts to prove that the transaction was “legitimate.”

Nigerian security officials also said that it was normal practice to procure arms with cash.

“The Federal Government has submitted relevant data and documents on the transaction to South Africa and insisted that the transaction was legitimate. It also clarified that the funds were not laundered or smuggled for any covert manoeuvres. No launderer will be audacious to fly into a country in a chartered jet with such a huge cash,” a statement by PRNigeria, an agency that regularly disseminates media statements for the military, police and other security agencies in Nigeria explained.

The statement tallies with what top security officials told PREMIUM TIMES in confidence that the money was legit as the government decided to buy the arms secretly; because the U.S. government had allegedly blocked its efforts to buy arms openly.

However, the government’s explanation does not seem to be gaining traction with South African investigators as the Asset Forfeiture Unit, AFU, of the National Prosecuting Authority of South Africa, NPA, has obtained a court order to freeze the money.

The NPA, in a statement sent to PREMIUM TIMES Wednesday said that the manner in which the money was brought into the country breached the country’s laws that deal with the transfer of foreign exchange of such proportion.

“The money was initially detained by the South African Revenue Service (SARS) as it was not disclosed or declared at customs, and was above the prescribed legal limit for the amount of cash that may be brought into the country,” it said in a statement.

Investigators also cast serious doubt on the Nigerian government’s explanation that the money was meant for the procurement of arms and that it has provided documents and receipt to back its legitimacy, raising serious concern that suspects might have been in the process of laundering the money before it was intercepted.

The NPA said its investigation shows that Tier One Services Group, the firm Nigerian government claimed it wanted to procure the arms from, is not authorised to sell or rent military hardware.

“In court papers, the NPA submitted evidence that Tier One is not registered with the National Conventional Arms Control Committee and is thus not authorised to enter into any agreements regarding the sale and/or rental of military equipment,” the statement read.

Tier One has apparently issued an invoice to a Cyprus based company, ESD International Group Ltd, ESD, in respect of the procurement of armaments and helicopters to be delivered to Nigeria. However, South African investigators said the time when the invoice was prepared and the time the money was brought in threw up some serious issues of its true intent.

The money was ferried to South Africa less than a week from the date the invoice was prepared (September 8, 2014).
The involvement of a Cyprus based company also heightens the suspicion that this may be a case of classical money laundering. Cyprus is notorious for its secretive banking system, which attracts shady characters and corrupt politicians looking to dry-clean ill-gotten funds.

The NPA added that the transaction did not follow normal procedure in the procurement of the kind of equipment it was alleged to have been meant for.

Op-Ed: We’re withdrawing from the Arms Procurement Commission, and here’s why

September 1, 2014 Leave a comment

Daily Maverick

By A FEINSTEIN, P HOLDEN AND H VAN VUUREN

August 29, 2014

The Arms Deal was a uniquely damaging moment in our young democratic history. It was concluded after decades of uncontrolled spending on foreign and internal wars by the apartheid regime. From the signing of the contracts in 1999 up to R70 billion of public money continues to be spent on weapons of questionable utility. The country was not and is not facing any meaningful military threat. But rather the most pressing problems that faced us then as they do now are inequality, poverty and unemployment

Since its inception the Arms Deal has been dogged by well supported allegations of corruption. We together with many other activists have consistently challenged the State to fully investigate and prosecute these allegations. Four previous investigations have failed to fully probe the Arms Deal.

We have engaged with these matters in different capacities over many years and we have done this out of the commitment to the primacy of the Constitution and the rule of law in our democracy. Given this commitment we believe that all allegations of corruption must be investigated and prosecuted without fear and favour.

After careful consideration, with great disappointment we have decided to withdraw all participation in the Seriti Commission of Inquiry into the R70 billion Arms Deal.

The appointment of the Commission raised great expectations that the truth would finally be established, and that this would challenge the interests of politicians, middlemen and large corporations in one of the most corrupt industries in the world. The Commission had the prospect of serving not only South Africans but all people across the globe campaigning against the devastating impact of corruption in the arms trade.

The Commission has failed on both accounts. It has missed a historic opportunity to support the struggle for transparency and accountability of the powerful.

We have not made our decision lightly. It follows nearly two years of actively trying to support the work of the Commission, assisted by an exceptional pro bono legal team led by Lawyers for Human Rights.

We have taken our decision due to serious and fatal concerns we have regarding the manner in which the Commission has conducted itself. There are four key reasons why we have decided to withdraw:

  1. The Chairman, Judge Willie Seriti, indicated that he was not interested in hearing evidence from witnesses about documents that they had not themselves written. Judge Seriti made this ruling during the testimony of Member of Parliament Mr David Maynier. This prevented Mr Maynier from giving any substantive evidence, as he was not the author of documents that emanated from investigations or government departments. This is particularly disturbing as this limitation was not applied to previous witnesses who were supportive of the Arms Deal. The implication of this ruling is that only those who have been involved in the Arms Deal can introduce evidence. How the Commission intends to discover the truth by only hearing from participants in the Deal is a mystery.

The Chair has also ruled that witnesses should only speak to corruption allegations of which they have personal knowledge. The logical conclusion of this ruling is that only those who have been corrupted, who have corrupted others, or who were intermediaries in such corruption, can give evidence of it. It is obvious that all of these parties have an interest in hiding the truth. Why would the Chair choose to rely solely on their opinions?

We have conducted extensive research into the Arms Deal. We have analysed thousands of documents, and interviewed people who are able to point to where evidence of corruption is likely to be found. We were not direct participants in the Arms Deal. If we are not allowed to talk to documents that we have not written, nor speak to corruption allegations based on documentary evidence, there is no point in our appearing as witnesses. This process will serve to undermine the critics without addressing the evidence they have accumulated. This can only serve to protect the corrupt and compromised.

In response to our attempt to resolve this issue, the Commission has informed us in their correspondence of 27 August 2014 that “The decision [to admit evidence of which a witness not the author, nor facts within a witness’ personal knowledge] will be influenced by the circumstances of each case, including the document’s relevance to the terms of reference and the purpose for which it is sought to be used.” There is no basis on which we can have any expectation that we will be permitted to give evidence on matters not within our personal knowledge, and rely on documents we are not the authors of. The Commission’s rulings to date in respect of other ‘critic’ witnesses, and the Commission’s rulings to date in respect of our cross-examination of other witnesses, clearly indicate the contrary. The Commission has not undertaken that it will now reverse its previous approach. (If it did so, procedural fairness would require the recall of a number of witnesses). Read more here.

Ugandan Head of Health Procurement Dismissed over Alleged Bribe

August 25, 2014 Leave a comment

State House of Uganda

August 22, 2014

President Yoweri Museveni has directed the Permanent Secretary Ministry of Health Permanent Secretary, Asuman Lukwago, to dismiss the Head of Procurement, Frank Mugisha, for allegedly asking for a bribe from an Italian investor.

The President’s directive follows a complaint from Enrica M. Pinetti the chairman of Finasi Company that Mugisha had asked for a bribe of 20% of the total project she was handling in order to finalize the procurement processes.

Finasi, founded in the early 1970s is an Import/Export and primary goods trader in the Middle East and Africa. It has innovated and developed specific know-how in the Healthcare, Oil and Gas, Interiors and organic food fields delivering value-added services to its clients.

The company is a global turnkey provider for Healthcare facilities, projects and supplies.

Other countries where it has been carrying out similar projects includes Egypt, Sudan, Libya, Russia and Dubai.

In a meeting that took place yesterday, between President Museveni, Ministry officials and the Investors at State House Entebbe, the President directed that Mugisha be removed with immediate effect and be replaced with a devoted civil servant who cannot steal.

‘‘How can you keep a thief in the Ministry? And how are you going to counsel a thief? A thief is a thief. He should be removed,” he said.

The President pointed out that the coming of the Finasi Company to Uganda was at his request to build a first class hospital that will be dealing with complicated problems such as kidney and heart operations.

“I requested them to come to Uganda to deal with kidney and heart problems so that people stop travelling to India for treatment,” he said.

The President also directed the Ministry to iron out its differences with the investor in two weeks and pave way for the project.

According to a report from the Minister of Health Dr. Rukahana Rugunda to the President, Mugisha formerly worked with the Ministry of Agriculture before being transferred to the Health Ministry were he has been for nine months.

Ms Enrica Pinetti also behind efforts to add value to Uganda’s coffee for export as powder is pleased by President Museveni’s action.

Uganda overhauls procurement rules to ‘eliminate influence peddling’

April 26, 2014 Leave a comment

SupplyManagement

8 April 2014 | Will Green

Government procurement regulations in Uganda have been revamped to support local businesses, speed up processes and “eliminate influence peddling”.

Under the changes bid evaluation teams will have to work to fixed time frames, and officials and ministers will not be allowed to bid for contracts with the government institution they are employed by or responsible for. A tribunal will also be established to handle complaints about the work of the Public Procurement and Disposal of Public Assets Authority (PPDA).

The new regulations include preference schemes that give advantages to local suppliers when procuring goods, services and works. Some contracts will also be set aside for young people, women and people with disabilities.

Meanwhile, officials “shall not sign a contract whose contract price is above the market price of the product being procured” to “eliminate cases of the government paying ridiculously high prices for procurements”.

Government bodies will be required to publish procurement plans, firms will be able to request information on unsuccessful bids, and in certain situations bidders will be allowed to submit a non-monetary “bid securing declaration” instead of using a costly bid security.

A PPDA spokesman said: “With 60 per cent to 70 per cent of the government budget being spent on public procurement and the public outcry against corruption and influence peddling, the law has been strengthened to limit who can provide services to government.”

The changes, which came into force in March, also include special provisions to enable faster and more efficient procurement of medicines and supplies for medical facilities.

The spokesman said: “The amendments will significantly change the way public procurement is managed in Uganda. Some of the immediate benefits are promotion of local businesses under the preference and reservation schemes, and efficiency in public procurement. The new law also demands great accountability from both public and private officials involved in procurement.”

South Africa: SCOPA must investigate Hitachi’s govt contracts

March 5, 2014 Leave a comment

PoliticsWeb

Natasha Michael
March 3, 2014
DA MP says Chancellor House’s sale of its shares in company has made this a matter of urgency. Parliament must intervene in Hitachi debacle.

The DA will be writing to the chairperson of the Standing Committee on Public Accounts (SCOPA) requesting him to urgently lead an investigation into all Hitachi Power Africa and government contracts and deals in the last five years.

The recent revelation that Chancellor House – the ANC’s business wing which partially owns Hitachi – has opted to sell its shares in Hitachi Power Africa for an “undisclosed amount”, has made this a matter of urgency and is very questionable.

This is because Hitachi is the company that was not only awarded the contracts of R38 billion to install boilers at the Medupi and Kusile power stations. But those projects have been delayed because of many mistakes and bungles by contractors, including Hitachi itself. Medupi is not yet even close to being complete, and Kusile has only just begun.

In the wake of the delays at Medupi, the DA made efforts to establish the cause for the delays. All efforts to obtain such information however have subsequently been shut down at every turn.

For years the DA has been saying that there is a clear conflict of interest and corruption for President Jacob Zuma’s ANC to be making money off government contracts. That is corruption, plain and simple.

It is simply unacceptable that the ANC is allowed to dubiously award itself a R38 billion contract, make a mess of the project at Medupi – putting South Africa’s energy supply at risk – and then deciding to cash in whenever it pleases, all at the cost of millions of people.

If Parliament is determined to represent its people and ensure transparency in public contracts, Chairperson Godi must urgently call on Minister Gigaba to bring all contracts between Hitachi and the government in the last five years before the committee. SCOPA must ensure this happens without delay.

I will, alongside the DA representative on SCOPA, Dion George ensure that Chairperson Godi does not ignore our calls for Hitachi to be brought to account without fail.

This is not a good story for the people of South Africa, and the truth must be made known.

Statement issued by Natasha Michael MP, DA Shadow Minister of Public Enterprises, March 3 2014

Nigerian ICPC uncovers government contract scam

December 22, 2013 Leave a comment

SupplyManagement

20 December 2013 | Gurjit Degun

At least 156 companies have forged tax certificates to bid for government contracts in Nigeria, according to the Independent Corrupt Practices And Other Related Offences Commission (ICPC).

It follows a preliminary investigation by the ICPC and trebles the number of firms initially suspected of fraudulent activity. Last month, the Bureau of Public Procurement reported 50 companies to the ICPC and the Economic and Financial Crimes Commission.

Folu Olamiti, spokesman for the ICPC, said: “Preliminary investigations indicate about 156 of these companies may face prosecution for using fake tax clearance certificates.”

The ICPC advised tax authorities to learn good practices from states that have tamper-proof tax certificates.

“They should create electronic platforms to synchronise with the Integrated Personnel Payroll Information System and automate the issuance of tax clearance certificates annually to public service employees so as to reduce the incidence of illegally acquiring certificates from easier sources,” the commission said.

The ICPC has not revealed the names of firms involved.

How cars and smartphones ‘inflated’ Huawei’s NetOne Zimbabwe

December 11, 2013 Leave a comment

ITWebAfrica

By Gareth van Zyl

Cars, smartphones and solar powered cell towers were among items that inflated an initial price tag of Chinese telecommunications equipment firm Huawei’s controversial network upgrade deal for Zimbabwean state-owned mobile operator NetOne.

This is according to documents a source has provided to ITWeb Africa regarding the network upgrade deal, which is facing a court case in Harare amid allegations that the over $200 million contract was awarded illegally.

Zimbabwean-born Tafadzwa Muguti, who lives in South Africa, has taken NetOne, Zimbabwe’s State Procurement Board (SPB), Huawei and the Anti-Corruption Commission of Zimbabwe to Harare’s administrative court over the awarding of the $200 million contract.

The businessman, who is the chief executive officer of investment group Africapaciti, wants to find out how Huawei won the NetOne contract, even though the Chinese company did not go through an official tender process.

Because NetOne is a state-owned entity, it is obliged to adhere to Zimbabwe’s procurement laws with regard to the awarding of contracts, Muguti has argued.

Muguti also alleges the contract was awarded to Huawei despite Zimbabwe’s SPB having expressed concerns over an inflated price for the project. The SPB is the first respondent in Muguti’s court case.

And documents detailing the record of proceedings regarding the awarding of the deal, which are in the hands of ITWeb Africa, illustrate the SPB’s initial concerns about the Huawei deal.

In a July 2013 letter from NetOne to the SPB, in which the mobile operator addresses concerns about the Huawei deal to the SPB, an amount of $298.6 million is quoted for the upgrade, which hinged on a loan from China’s Exim Bank.

That figure was then dropped to $251 million, according to the documents, and ultimately — as the documents later reveal — this figure was cut to $218 million.

NetOne officials, in the document, argued that only Huawei could carry out the upgrade deal as the mobile network’s infrastructure is from the Chinese telecommunications firm.

But the State Procurement Board then raised the following issues, which are summarised below:

  • “Members noted with concern that the Secretariat had failed to properly analyse the matter for logical presentation to the board.”
  • “The presentation was jumbled up and comprised of disparate requirements including Upgrades, New Equipment and Construction of a Building.”
  • “The matter was also hastily presented as an urgent item without adequate background and factual information.”
  • “Background was inadequate and lazy.”
  • “There was no clear justification why the current requirements should not go to tender, in light of the unclear relationships between the projects.”

The documents reveal that on 27 June 2013, the State Procurement Board deferred the pending of the contract to await further input.

The board also raised concerns about “the procurement of smartphones and tablets for resale to the public, which are not part of the network upgrade.”

Furthermore, the documents also highlight concerns that Huawei had quoted inflated prices for equipment that may not help with a widespread upgrade to next generation LTE.

Items that the deal was initially planned to include were as follows, according to the record of proceedings:

  • Purchase of 1336 2.75G base stations
  • Purchase of 600 3G base stations
  • Purchase of 400 4G base station
  • Supply of 500 diesel generators to serve as stand-by power at base station sites

NetOne in the documentation does argue that Huawei has quoted it at a lower price for base stations at $170,000 rather than the market price of $180,000.

In the documents, the Zimbabwe’s ministry for transport, communications and infrastructure development, did write to the SPB calling for the upgrade to be given to Huawei.

The ministry argued the deal could help NetOne boost its services, subscriber base and contribute to Zimbabwe’s ICT development.

But a letter from the Transport department then outlines how the project had been scaled down.

“Some of the key components that have either been scaled down or removed as a result, include Base station Towers that have been reduced by half, removal of four wheel drive vehicles for project implementation and maintenance, solar powered Base Stations that were meant to serve as coverage gap fillers, the online charge system, where NetOne will later have to expand the existing system to meet the increased subscribers to be connected,” says the letter.

The response goes on to allay fears regarding the number of 4G stations, as the Transport department said that these would be deployed in highly dense urban areas to cater for demand.

The Huawei-NetOne contract, though, was publicly announced in July while deliberations continued in the background.

And in that same month, concerns about the deal were communicated from the State Procurement Board in a record of proceedings.

Among these included:

  • “Members noted that there were allegations of overpricing some aspects of the project components.”
  • “Members noted with concern that according to the minute from the Secretary for Transport, Communications and Infrastructure Development to Treasury dated June 19, 2013, NetOne and Huawei Technologies of China had already signed a contract for the Works without authority.”

A board resolution on the 18th of July then further deferred the matter.

Further reading into the documents also reveals that the Post & Telecommunications Regulatory Authority of Zimbabwe but that concerns existed that the watchdog had not consulted the relevant industry experts.

The contract price in the documents goes down then to $218 million, while reports in July talk of a deal that was just over $200 million

Court case postponed

Subsequently, on 19 November, Tafadzwa Muguti’s court case against the relevant parties was postponed.

However, in court documents, the SPB has outline that it did finally approve the Huawei deal, despite its concerns outlined in the record of proceedings.

The board then further highlights how it consulted advice from three government ministries and telecommunication and IT engineers.

The board goes on to say in court papers that the urgency of the upgrade drove its decision.

As a result, the board asked that the court reject Muguti’s appeal as “frivolous and vexatious.”

The board also then asks that the court finds that its decision was “prudent and feasible.”

Finally, the board asks that the court throws out the appeal with costs for a lack of merit.

Huawei responds

Chinese telecommunications equipment firm, Huawei, meanwhile has also denied alleged corruption regarding the deal.

“For the project with NetOne, we strictly abide by all procurement laws and regulations in Zimbabwe, our target is to help Zimbabwe people enjoy their life through communication at affordable price,” Jacky Zhang, who works with Huawei Technologies Zambia but manages communications for Zimbabwe, told ITWeb Africa.

“The allegation for over-inflated is not base on the truth,” Zhang told ITWeb Africa.

ITWeb Africa also asked NetOne for comment, but the company has not responded to emails.

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