The Tanzania government has thwarted an attempt to swindle $9 million out of liquidated shipping firm National Shipping Agencies Company Ltd (Nasaco) and its subsidiaries by pretending that it was required to pay the money as a settlement to a Swiss-based shipping line firm, Mediterranean Shipping Company SA, arising out of a court case that was actually closed a year ago.

The EastAfrican has been exclusively informed that investigators are now closing in on four senior government officials at the management level of the Consolidated Holding Corporation, the statutory corporation established by parliament for reorganisation and vesting of assets and liabilities of the liquidated and privatised state firms.

The four have been sent on compulsory leave.

This will be the first major financial scam in which the fraudsters were caught before they could actually siphon out government funds.

Just last week, this newspaper reported a fraud in which an international syndicate successfully made away with $77 million from the accounts of the Tanzania Revenue Authority.

Initially, three management employees colluded in a prepared report to the Ministry of Finance and Economic Affairs claiming that there was a case still pending at the High Court that needed the government of Tanzania to pay Mediterranean Shipping for a court case that was closed in August 2008.

Minister for Finance and Economic Affairs Mustafa Mkulo told The EastAfrican in Dar es Salaam last week that four officials at the Consolidated Holding Corporation, a statutory corporate which took over from the Parastatal Sector Reform Commission, had been forced to go on leave in order to facilitate investigations.

Mr Mkulo said the government had wanted the Corporation to prepare a report on the financial position of the liquidated Nasaco to enable the Cabinet to make informed decisions on disposal of the parastatal firm.

According to Mr Mkulo, after the Consolidated Holding Corporation handed its report to the government, details showed that Mediterranean Shipping Company of Switzerland had yet to be paid $9 million, spurring the government to order a thorough investigation that revealed the four officials had allegedly colluded to defraud the government.

“The government discovered that the report contained some inaccuracies because the $9 million (Tsh11.62 billion) which was what an international shipping line was demanding from the Nasaco had been included when the actual case had already been dismissed earlier this year by the Court of Appeal,” Mr Mkulo said.

Surprisingly, The EastAfrican has been informed that the CHC management never discussed the matter with the board nor did they include information from the liquidators on the case in question, including the outcome of the case.

A source in the government told The EastAfrican that on discovering the attempted fraud, the government summoned the CHC board and inquired how it had allowed the inclusion of the $9 million as being a valid claim.

Thereafter the board undertook an investigation and discovered that indeed the report to the minister did contain inaccuracies.

The report said the case, number 250 of the year 2000 between Mediterranean Shipping Company of Geneva SA and Nasaco at the Court of Appeal, had greatly contributed to the slowing down of the Nasaco liquidation process.

In March, it was discovered that the case in question had been dismissed a year before, on August 14, 2008, even though the CHC management wanted to show the minister that the defunct company still owed the money to Mediterranean Shipping and the debt should be paid from the sale of the liquidated company’s assets.

“The government wouldn’t want to prejudice any future actions that may be taken against any official involved, but we are almost there,” said Mr Mkulo.

The National Shipping Agency Company was privatised amid protests from different stakeholders at the end of the 1990s.

But even before Nasaco, was privatised, the government had issued licences to foreign shipping companies to operate in Tanzania.

This enthusiasm for opening up the shipping sector led some critics to say that Nasaco was no longer a serious candidate for privatisation.