Who really owns Dowans?

The directors granted power of attorney in favour of Mr Aziz 

By Joint Report  (email the author)
Posted Monday, January 31 2011 at 00:00

Powerful businessman and ruling party MP for Igunga in Tabora, Rostam Aziz, is to be a beneficiary in the Dowans Tanzania award.

According to the proceedings from the International Court of Arbitration of the International Chamber of Commerce also known as the International Commercial Court (ICC), which recently awarded Dowans Holdings S.A. and Dowans Tanzania $65 million as compensation for breach of contract by the Tanzania Electric Supply Company (Tanesco), Mr Aziz was appointed Dowans’ attorney-in-fact as far back as 2005 “to manage the company’s affairs outside the Republic of Costa Rica.”

According to the resolutions of the Dowans Holdings board of directors, two directors of the company, Bernal Zamora Arce and Noemy del Carmen Cespedes Palma, granted in the name and on behalf of the company, a power of attorney in favour of Mr Aziz.

Powers granted to Mr Aziz include: “To transact, manage, carry on and do all and every business matters and things requisite and necessary or in any manner connected with or having reference to the business and affairs of the company and, for such purposes, to conduct all correspondences appertaining to such businesses and affairs.”

The directors further granted Mr Aziz the power “to open and to close bank accounts... and to draw cheques on our accounts... and to sign all kinds of documents in connection with our accounts or money,” read part of the resolutions signed by the firm’s secretary, Mrs Palma.

It goes further to give Mr Aziz, the immediate former CCM treasurer and shareholder in the short lived RVR Rail Consortium that brought together Kenya and Uganda railways, the power to “pay, settle, deduct and allow all taxes, rates, charges, deductions, expenses and all other payments and outgoings whatsoever due and payable or to become due and payable for or on account of any property, whether movable or immovable and whether in possession or in action, now or hereafter belonging to us or to which we may become entitled.”

Mr Aziz has consistently denied having any links to the Richmond company that was involved in the scandal that saw former prime minister Edward Lowassa resign his post (see Box). Dowans is the successor company to Richmond.

According to documents tabled in the arbitration proceedings, which The EastAfrican has seen, one Mr Gire, a cofounder of Richmond (REDVCO) who faces a court case in Tanzania over the same issue, is said to have told the ICC that the owner of the company is Mr Aziz.

The ICC was told Mr Aziz was such a “powerful and influential” individual that some laws were amended in his favour. The Richmond scandal was the subject of a Parliamentary probe that led to the resignation of the Mr Lowassa.

According to the report of the proceedings, the ICC accepted the finding that Mr Aziz was so “powerful and influential” as to have diverted the contract to the claimant, Dowans, outside the Public Procurement Act.

The contract went to favour “his friends and himself through the claimant and to have influenced the MEM (Ministry of Energy and Minerals) to force Tanesco’s Mr Hans Lottering to sign the POA (agreement for emergence power supply).”

Mr Lottering testified before the ICC that he was told that “something would happen” to him if he did not sign the POA. He was formerly Tanesco’s general manager-transmission under Net Group Solutions of South Africa.

The evidence presented before the Tribunal shows the involvement of Mr Aziz in getting the whole procurement out of the PPA and diverting the lucrative contract to a “business of him and his business friend” derived from the testimony of Henry Surtee.

The Tribunal accepted the testimony of Mr Lottering that, “even using the international tendering (open tender method) which is the most inefficient and the longest method, if not interfered with, Tanesco would have procured the POA more efficiently and within a much shorter period than the period of 18 months that the Ministry of Energy and Minerals took to procure POA through the committee formed outside the law.”

Last week, Minister for Energy and Minerals William Ngeleja named the owners of Dowans Tanzania as Dowans Holdings S.A and Portek Systems and Equipment PTE Ltd.

He named the directors of Dowans Tanzania as Tice (Canadian), Gopalakrishnan Balachandran (Indian) and Hon Sung Woo (Singapore). Others are Guy Arthur Picard (Canadian), Suleiman Mohammed Yahya Al Adawi (Oman) and Stanley Munai from Kenya.

Under the country’s Company Ordinance Act, there is no restriction on owners’ citizenship or country of origin of a company.

A firm can be registered in Tanzania even if its owners are 100 per cent foreigners.
“The nature of owners is not a concern when opening a company in the country; it could be owned 100 per cent by foreign individual(s) or corporate firm(s),” Business Registration and Licensing Agency chief executive officer Esteriano Mahingila said.

The CEO also confirmed that the Dowans files contained the same list of directors as mentioned by the minister of energy and minerals.

“These files are public documents, whoever wants to peruse or even photographing them are allowed,” Mr Mahingila told The East African, “the file is here.”

The government was yet to decide whether to pay the $65.8milion (about Tshs 94 billion) to the owners of Dowans Holdings SA and Dowans Tanzania.

It is noted in the award ruling presented for registration at the high court that the practice regarding arbitrations is that an award has to be registered with the High Court for it to be a decree as if one issued by the High Court.

However, if a party isn’t satisfied with an award, “there are two routes available either to apply to the Tanzanian court to remit the award to the arbitrators for reconsideration of certain issues or to apply to the high court to set aside the Award.

“To apply to set aside an award, it must be that the Award was improperly obtained or that the arbitrators misconducted themselves,” reads part of the ruling by the ICC.

Source:The East African