Govt steps up Airtel ownership battle by probing bank accounts

30Dec 2017
The Guardian Reporter
The Guardian
Govt steps up Airtel ownership battle by probing bank accounts
  • MANDATORY DISCLOSURE - BoT gives banks 1-day ultimatum to release confidential documents on the telecom company's financial dealings in Tanzania over the past 17 years

THE Bank of Tanzania (BoT) is looking into the bank accounts of Airtel Tanzania to establish, among other things, how much money the telecom company currently has in the country's banking system as the government steps up its ownership battle with the mobile network operator.

The BoT ordered all the country's banks and financial institutions to submit to it bank account details, including Airtel Tanzania’s latest bank account balance, by yesterday morning.

The central bank demanded bank account details of Airtel Tanzania and its predecessor companies -- Celtel Tanzania and Zain Tanzania -- over a period covering 17 years and gave banks just one day to provide all that information.

"As part of its regulatory and supervisory mandate, the Bank of Tanzania is reviewing accounts operations in banks and financial institutions in respect of M/s Celtel Tanzania, Zain Tanzania and Airtel Tanzania and their related entities," BoT said in a letter seen by The Guardian that was sent to all banks and financial institutions on Thursday this week.

"Relevant account statements from 1 January 2000 to 27 December 2017 should be submitted along with the account details. The information in both hard and soft copy should be submitted to the Bank (BoT) by Friday, 29 December 2017 at 11.00am."

It could not be immediately established how many banks and other financial institutions complied with the regulator's instructions by the expiry of yesterday's deadline.

The letter was signed by the Director of Banking Supervision at BoT, Kened Nyoni.

The information demanded by the central bank on the telecoms company included the account name, account number, currency and balance of all accounts held by Airtel Tanzania, Celtel Tanzania or Zain Tanzania as of 27 December this year.

The central bank also asked all banks to inform it if they at any time maintained or are still maintaining bank accounts with Airtel Tanzania or its predecessor companies.

President John Magufuli ordered the country's finance minister last week to investigate claims that the Tanzanian government owns 100 per cent of the shares in Airtel Tanzania.

The Tanzanian government currently owns a 40 per cent stake in Airtel Tanzania, with the remaining majority 60 per cent owned by India's Bharti Airtel.

But Magufuli said he had information suggesting that the state-run Tanzania Telecommunications Company Limited (TTCL) actually has full ownership of Airtel Tanzania, but was cheated out of its shares.

"According to our information, Airtel belongs to TTCL. I don't want to speak about the details publicly, but a dubious deal was done (to misappropriate the shares)," Magufuli said.

"I want the finance minister to follow up these reports and put an ends to these dubious deals."

Indian telecoms carrier Bharti Airtel responded to Magufuli's claim last week by saying that there were no irregularities in deals that made it the majority shareholder in Airtel Tanzania.

Bharti Airtel said it had not received any official notice or communication from the Tanzanian government over the ownership dispute, but would work closely with the government to resolve doubts to the satisfaction of all shareholders.

“Our acquisition of the said 60 percent shareholding in June 2010 was in full compliance with and following all approvals from the Govt. of Tanzania,” the company said in a statement.

"We would like to clarify that the mentioned transaction of 2005 was well before the acquisition of the 60 per cent shareholding in Celtel Tanzania Limited from Zain to a Bharti Airtel group entity in June 2010."

Bharti Airtel said it intends to cooperate with the Tanzanian government and will "take all steps necessary to resolve any doubts or concerns to the satisfaction of all of the stakeholders, including our shareholders."

Government officials said Airtel Tanzania has been reporting losses despite the telecoms sector in Tanzania experiencing booming growth over the past decade.

Like other African countries, mobile phone use has surged in Tanzania over the past decade on the back of cheaper smartphones, recording a 0.9 per cent annual increase in the number of mobile phone subscribers in 2016 to 40.17 million.

Other major mobile phone operators in Tanzania include Vodacom Tanzania, part of South Africa’s Vodacom, Tigo Tanzania, which is part of Sweden’s Millicom, and Halotel, owned by Vietnam-based telecoms operator Viettel.


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