ONE shipping company which used a local shareholder as a front and managed to run agency business contrary to the 2002 Shipping Agency Act has paid the deceased's inheritors over 100m/- to settle a legal wrangle dating back to 2009 when Capt John Nyaronga was alive.

The late Capt. Nyaronga who acquired a controlling stake at Mediterranean Shipping Company in 1999 from the company's founders, Sudhir Kalidas and Felix Mbuya in 1989, disputed his dismissal from the company in 2002.

Tanzania Taxpayers Association (TT A) Chairman, Otieno Igogo said in Dar es Salaam on Friday that the late Nyaronga's case represented a clear testimony as to the extent of cheating that is happening in the local shipping agency business.

"My deceased friend's family has been paid for his 10 per cent shareholding at one of the shipping companies where, according to the law, he was supposed to have 51 per cent of the shares," Mr Igogo told a stakeholders meeting debating proposed amendments to the 2002 Shipping Agency Act.

The meeting which was organized by Surface and Marine Transport Regulatory Authority (Sumatra), witnessed several local shipping experts challenging the regulator to reign in rampant cheating in the important industry, which has been neglected by the government.

Nyaronga who filed a case against Messrs Ponti, Anil Patel and C.T.T Transport Limited in 2009 disputing shareholding of the company, died before exhausting legal challenge which allowed his inheritors to get payment from MSC, after an out of court settlement recently.

"This is the case in almost all the shipping agency companies operating in the country except one or two which are doing serious business," alleged Francis Kimathi who pointed out that he did a research last year which shows illegal foreign ownership as being dominant.

Mr Kimathi who said that his research report was presented to the regulator and Ministry of Transport, dismissed the proposed 60 per cent shareholding threshold as inadequate, saying agency business should be owned by locals at 100 per cent. "Let us allow local shipping businesses choose their principals instead of providing some room for multinational shipping companies to pick them," he argued.

According to records at Business Registration and Licensing Agency, Sudhir Kalidas and Felix Mbuya transferred their shares to Italian captain Ferdinando Ponti, Giovanni Cuomo of Geneva, Switzerland and Tanzanian captain John Nyaronga who was also appointed Managing Director by 1999.

"At a 5th ordinary board meeting held in Mombasa on 26th March 2001, resolved that Cuomo, Ponti and Nyaronga get nine shares each while Franco Ronzi got 10 shares and M/S United Agency got 19,960 shares," reads part of the board's resolutions filed at Brela.

In another twist of events, local shipping businessman, Mr Patel was appointed as director of the company's board in December 2002, after acquiring 10,000 shares in not so clear a transacted deal. Mr Patel came aboard with his C.T.I Transport Limited which is registered in North Quay in British Isle of Man.

Patel who owns Tanzania Shipping Agency Limited which represents Rotterdam based WEC Lines, dismissed allegations that MSC uses his name as a front. "A Tanzanian can own shares in any company he wishes to buy," Patel argued in an emailed message while responding to the allegations.

He further noted that MSC is, "fully compliant with the Sumatra's directives." Sumatra Legal Director, Tumaini Silaa said, among other things which the new amendments will incorporate, will include requirement for shareholders to submit their share certificates to the authority, but also show annual income earned and taxes paid.