28 May 2014

Tanzania: Ex-CEO of Tanzania's State-Run Power Company Charged With Graft

The former chief executive of Tanzania's state-run power company, who was sacked two years ago over corruption allegations, has been charged with abuse of office and forgery. William Mhando, the former managing director of Tanzania Electric Supply Company (TANESCO), along with his wife Eva and three other employees of were arraigned on Monday before the court in Dar es Salaam on charges of abuse of office, forgery and obtaining money by false pretence.

Mhando in 2012 was implicated in the corruption scandal when a state audit report found that the chief executive allegedly had embezzled public funds by awarding a contract worth more than 884 million Tanzanian shillings (US $554,500) to a private firm he jointly owns with his wife.

"The Controller and Auditor General found clear evidence of abuse of company procedures and abuse of office against the managing director," the company said in a statement in 2012.

The move to prosecute a former TANESCO's top official is a sign that Tanzanian authorities are toughening the fight against graft in the country's energy sector, following a barrage of criticism, including from international donors, over the government's sluggish pace in curbing corruption.

The energy sector has been the focus of a number of scandals at high levels in the past decade, and Tanzania's power supply for a long time has been erratic, with prolonged and unannounced blackouts that deal significant blows to manufacturers, businesses and domestic consumers.

The Prevention and Combating of Corruption Bureau prosecutor, Leonard Swai, alleged during the court hearing that between April and Dec. 31, 2011, Mhando used his influence as TANESCO's CEO to award a lucrative contract to his wife's company, contrary to the Public Leadership Code of Ethics Act.

The prosecutor further alleged that between Jan. 6 and July 30, 2011, Eva Mhando forged a financial report purporting to show that the company's books had been audited, which was untrue.

Swai further alleged that between April and October 2011, Eva Mhando obtained Tsh. 31,747,000 (US $19,841)'s worth of office stationary from TANESCO after submitting alleged forged documents.

All the accused denied the charges and were released on bail with bond set at Tsh 8 million (US $4,711) each. A preliminary hearing in the case is scheduled for June 13, 2014.

In July 2012, the speaker of Tanzania's National Assembly disbanded the parliamentary energy and minerals committee after some of its members were accused of corruption and potential conflict of interest over their alleged involvement in deals with TANESCO.

In 2008, former Prime Minister Edward Lowassa and two other ministers resigned after they were implicated in a multi-million shilling power generation scandal.

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