IPTL TAKE OVER WAS A CLEAN DEAL
The IPTL company secretary and the chief counsel, Joseph Makandege
(right) displays document at a press conference in Dar es salaam, with him
is the Executive chairman, Harbinder Singh Sethi - who owns IPTL via a
holding company known as Pan African Power Solutions Tanzania Limited (PAP).
Executive chairman, Harbinder Singh Sethi - who owns IPTL via a
holding company known as Pan African Power Solutions Tanzania Limited (PAP)
speaking to journalists..
======== ======== ==========
IPTL TAKE OVER WAS A CLEAN DEAL
Executive chairman, Harbinder Singh Sethi - who owns IPTL via a holding
company known as Pan African Power Solutions Tanzania Limited (PAP) denied
any wrongdoing in the deal on Tuesday, saying he followed all the legal and
regulatory procedures in the process.
³I followed all the procedures....I did not come to Tanzania to make
money....I want to help Tanzania to get enough electricity that is vital in
economic development,² he told a section of journalists in Dar es Salaam.
Mr Sethi puts the amount that was/is in the escrow account at about Sh150
billion, noting however that there was nothing wrong with his company
transferring the assets for IPTL including money - to PAP since the latter
is the legally-accredited holding company for IPTL.
Before being acquired by PAP, IPTL was owned jointly by a Malaysian firm,
Mechmar Corporation and Tanzania¹s VIP Engineering and Marketing Company
Limited, with the former controlling a 70 per cent stake.
The company, according to its secretary and chief counsel, Joseph Makandege
operated peacefully for just about five years before unending wrangles
erupted between the two shareholders prompting money to be sent to the
escrow account.
³With squabbles between shareholders, VIP became suspicious that the money
would be defrauded so he sought a court order demanding that money, paid
by Tanesco [the Tanzania Electric Company Limited] to IPTL, should be
deposited in the escrow account at the BoT,² he explained.
In 2010, Mr Sethi brought all the documents, confirming that he has been
duly chosen as the custodian for all of Mechmar assets in Tanzania.
The court cases notwithstanding, Mr Sethi went ahead to buy all the shares
that Mechmar had earlier sold to Piperlink and transferred them to PAP.
This, in essence, meant that Mr Sethi through PAP - now owned 70 per cent
of shares in IPTL, with VIP owning the remaining 30 per cent.
He later engaged VIP so he could buy the latter¹s 30 per cent stake. ³VIP
agreed and was paid $7.51 million as down payment for a deal totalling $75
million,² explained Makandege, noting that the remainder was covered later.
Having settled the deal, VIP went to court requesting the judge to drop all
the cases involving VIP and Mechmar.
The court ruled on September 5, 2013 - in favour of VIP and all the cases
were dropped. PAP was thus granted the ownership of all of IPTL assets
including money in the escrow account. PAP also agreed to pay all IPTL
creditors. The duty of the provisional liquidator ended there
The new company, according to Mr Makandege, then embarked on a duty of
searching for wherever IPTL assets were. It arranged a meeting with Tanesco
where they arrived at the right amount that the state-owned utility firm
owed IPTL. ³In fact, Tanesco board directed the management to inform key
stakeholders that there were no more disputes between the state power
company and IPTL resulting into an official end of depositing IPTL money
into the escrow account,² he said.
The duty ahead of PAP remained that of making sure that money from the
escrow account was transferred into the PAP account.
³With that, an agreement had to be signed between IPTL and the government
through the Ministry of Energy and Minerals....it should be noted that money
in the escrow account belonged to two of IPTL shareholders.....it was
neither taxpayers¹ money nor money for Standard Chartered Bank Hong Kong,²
said Mr Makandege.
The government also required PAP to sign an Indemnity Agreement to the
effect that whenever a new creditor comes, then PAP would be responsible.
The government then wrote to BoT demanding that the money be released to the
rightful and legally-accredited owner. ³That was how the money was
released,² he explained.
Executive chairman, Harbinder Singh Sethi - who owns IPTL via a holding
company known as Pan African Power Solutions Tanzania Limited (PAP) denied
any wrongdoing in the deal on Tuesday, saying he followed all the legal and
regulatory procedures in the process.
³I followed all the procedures....I did not come to Tanzania to make
money....I want to help Tanzania to get enough electricity that is vital in
economic development,² he told a section of journalists in Dar es Salaam.
Mr Sethi puts the amount that was/is in the escrow account at about Sh150
billion, noting however that there was nothing wrong with his company
transferring the assets for IPTL including money - to PAP since the latter
is the legally-accredited holding company for IPTL.
Before being acquired by PAP, IPTL was owned jointly by a Malaysian firm,
Mechmar Corporation and Tanzania¹s VIP Engineering and Marketing Company
Limited, with the former controlling a 70 per cent stake.
The company, according to its secretary and chief counsel, Joseph Makandege
operated peacefully for just about five years before unending wrangles
erupted between the two shareholders prompting money to be sent to the
escrow account.
³With squabbles between shareholders, VIP became suspicious that the money
would be defrauded so he sought a court order demanding that money, paid
by Tanesco [the Tanzania Electric Company Limited] to IPTL, should be
deposited in the escrow account at the BoT,² he explained.
In 2010, Mr Sethi brought all the documents, confirming that he has been
duly chosen as the custodian for all of Mechmar assets in Tanzania.
The court cases notwithstanding, Mr Sethi went ahead to buy all the shares
that Mechmar had earlier sold to Piperlink and transferred them to PAP.
This, in essence, meant that Mr Sethi through PAP - now owned 70 per cent
of shares in IPTL, with VIP owning the remaining 30 per cent.
He later engaged VIP so he could buy the latter¹s 30 per cent stake. ³VIP
agreed and was paid $7.51 million as down payment for a deal totalling $75
million,² explained Makandege, noting that the remainder was covered later.
Having settled the deal, VIP went to court requesting the judge to drop all
the cases involving VIP and Mechmar.
The court ruled on September 5, 2013 - in favour of VIP and all the cases
were dropped. PAP was thus granted the ownership of all of IPTL assets
including money in the escrow account. PAP also agreed to pay all IPTL
creditors. The duty of the provisional liquidator ended there
The new company, according to Mr Makandege, then embarked on a duty of
searching for wherever IPTL assets were. It arranged a meeting with Tanesco
where they arrived at the right amount that the state-owned utility firm
owed IPTL. ³In fact, Tanesco board directed the management to inform key
stakeholders that there were no more disputes between the state power
company and IPTL resulting into an official end of depositing IPTL money
into the escrow account,² he said.
The duty ahead of PAP remained that of making sure that money from the
escrow account was transferred into the PAP account.
³With that, an agreement had to be signed between IPTL and the government
through the Ministry of Energy and Minerals....it should be noted that money
in the escrow account belonged to two of IPTL shareholders.....it was
neither taxpayers¹ money nor money for Standard Chartered Bank Hong Kong,²
said Mr Makandege.
The government also required PAP to sign an Indemnity Agreement to the
effect that whenever a new creditor comes, then PAP would be responsible.
The government then wrote to BoT demanding that the money be released to the
rightful and legally-accredited owner. ³That was how the money was
released,² he explained.
IPTL TAKE OVER WAS A CLEAN DEAL
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