AfricaPress-Tanzania: THE Controller and Auditor General (CAG) has completed a detailed forensic audit into massive fraud and mismanagement of Pride Tanzania—state-owned microfinance that was forced into early retirement due to outrageous debts and corruption scandals.
Finance and Planning Minister, Dr Phillip Mpango admitted in the National Assembly on Tuesday that the government has suffered considerably in its fight to regain the firm which was illegitimately privatized by few managers.
According to the minister, the state has appointed a special team of local experts to dive into the CAG report and help establish additional evidence and recommendation that could better address the problem.
“We have struggled a lot as the government. For so-long as Pride has been run illegitimately as a private enterprise until October 18, 2018 when the High Court Commercial Division overruled that the entity is indeed a state-owned,” he told the parliament.
“But we needed to conduct a detailed assessment of assets and capital…the forensic audit has been completed and we have formed a team to further review the audit and advise the government accordingly,” added Dr Mpango.
The minister ascertained that the government was considering taking legal actions against all individuals who conspired in the fraud and mismanagement of Pride Tanzania.
He went on noting that “we will take immediate action to improve the operation and performance of the microfinance.”
Initially, the Parliamentary Public Accounts Committee urged the government to work on the CAG recommendations without hesitation.
Delivering her Committee’s opinion, Chairperson Naghenjwa Kaboyoka, said Pride Tanzania had squandered a huge amount of taxpayers’ money.
In an audit report of December 31, 2016, Pride Tanzania had a balance of 428.3m/- but on October 31, 2019, had zero balance in its bank statements.
The chairperson went on to note that the microfinance also invested over 4.762 million shares in the Bank M worth over 1.904bn/-.
The company used the share as collateral raising the value of its share to 2.3bn/-in 2016. Pride had security bonds at the CRDB bank worth 29.525bn/-, Bank M and Azania Bank (15.28bn/-) both with an interest value worth 3.4bn/-. The recent audit showed the interest was then used to service the debt the company had with the same banks.
“The special audit revealed that at least 209 employees had borrowed over 11.148bn/-and they had not returned any amount as of October 31, 2019,” the chairperson said.The 209 employees include some 168 staff who resigned or got fired before repaying their debts worth 745.59m/-.
“Eight more employees who are still working with Pride still owe the company a whopping 15.76m/-and an additional 2.602bn/- missing without explanation,” she said adding that 33 other employees had been paid salary without statutory reduction worth 10.386bn/-.
Records showed that as of October 31, last year the microfinance agency had an outstanding debt amounting to 130bn/- that involved loans from local and the foreign financial institution, insurance and other service providers.
The chairperson said the amount lost by the microfinance agency was too much and that it could have helped the government in its development projects. In just a week after the high court ruled in favour of the state, the anti-corruption body announced a man-hunt for the former managing director of pride Tanzania over allegations of swindling 1.8bn/-.
The microfinance agency was involved in the provision of credit to small and micro-entrepreneurs in Tanzania. It was established in September 1993 with three branches in Arusha, Tanga and Dar es Salaam.
