17 September 2017

Tanzania: New Probe Into Petra Diamonds Scam As Plot Thickens

Photo: Daily News
Finance and Planning Minister, Dr Philip Mpango, centre, gets clarification on diamonds impounded at the Julius Nyerere International Airport on August 31. Looking on are: Prof Abdulkarim Mruma, 2nd right, Tanzania Revenue Authority Commissioner General Mr Charles Kichere, partly obscured - 3rd right, Deputy Director General of the Prevention and Combatting of Corruption Bureau Brigadier General John Mbungo, 4th right, and the Director of Public Prosecutions Biswalo Mganga (immediate right to the Minister).

Dar es Salaam — The government has ordered a new investigation into the Petra Diamonds saga that first surfaced on August 31, this year, when some gemstones were impounded at the Julius Nyerere International Airport, allegedly, for being undervalued.

Eng. Benjamin Mchwampaka, Commissioner for Minerals, told The Citizen on Sunday in an exclusive interview this week that further investigations had been launched, amid consultations with Petra Diamonds Tanzania Limited, to determine the circumstances surrounding the alleged undervaluation, before taking the next step forward.

"The government is still investigating the diamonds issue to establish all those who were involved in the export chain. We want to determine where exactly and how the undervaluation happened," Mr Mchwampaka said on Thursday.

Two government officials, the director of the Diamonds Valuation Unit, Archard Kalugendo and Diamonds Valuer Edward Rweyemamu, were charged in court on Friday for causing a Sh2.4 billion loss to the government after undervaluing a consignment that was being transported by Petra Diamonds to Antiwerp Belgium through the Julius Nyerere International Airport (JNIA).

The impounded diamonds were declared to be valued at $14.798 million (Sh33 billion) but after re-valuation they were found to be worth $29.5 million (Sh66 billion).

Mr Mchwampaka's revelations mean more heads could roll.

The decision by the government to deepen the investigations seems to be a U-turn of some sorts after the ministry of Finance and Planning had announced on September 9 that it was confiscating the impounded diamonds consignment because Petra Diamonds sought to cheat the government of its revenue.

A statement released by the ministry's Head of Communication Unit Ben Mwaipaja said the government decided to confiscate the diamonds after gross undervaluation was found to have been done by the transporters of the gemstones (Petra).

"The decision to confiscate the diamonds was given today by the minister for Finance and Planning Dr Philip Mpango after he received a report that showed the diamonds were undervalued," the statement, issued on September 9, reads in part.

That same day Dr Mpango had lead a high powered government delegation to the JNIA where the consignment was being kept. He received the report from a special team formed by President John Magufuli to re-value the diamonds, which was being headed by Prof Abdulkadir Mruma. The whole event was beamed live on national television, TBC1. Dr Mpango, then inspected the consignment and ordered that the process for its confiscation should start immediately, after the Tanzania Revenue Authority Commissioner General Charles Edward Kichere had told him that the East African Customs Management Act of 2004, section 210 (g) allows for the confiscation of undervalued items.

But on September 11 Petra Diamonds emerged saying they were not responsible for the undervaluation because the whole process is done by government valuation institutions located at the Williamson Diamonds Mine in Shinyanga.

"The government has complete oversight of the diamonds produced at the mine, which are physically controlled by a number of different government representatives in conjunction with Petra from the point of recovery until the point of sale," Petra said in statement.

The mining company, which was forced to temporarily stop operations because its key people were being interrogated by the authorities, also published receipts and documents from various government institutions that valued and verified the consignments.

The Petra's statement added; "It is the government's diamonds and gemstones valuation agency and not Petra that carry out the provisional valuation of diamond parcels from Williamson before they are exported to Antwerp, Belgium."

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