IPTL’s billions battle goes to London court

Dar es Salaam. 

The battle for the Independent Power Tanzania Limited’s billions has moved beyond Tanzania’s corridors of justice after a bank in Hong Kong sued VIP Engineering and Marketing and Pan African Power Solutions Tanzania Limited (PAP) in a London court.

Standard Chartered Bank-Hong Kong (SCB-HK), which is the senior debt lender to IPTL with an outstanding loan of $145million (Sh234.465billion) by December 23, last year, filed the case at the High Court of Justice Queen’s Bench Division, Commercial court.

Out of the outstanding loan of $145 million, a total of $36.34million is interest, penalty and default interests, claims SCB-HK in its plaint filed on March 11.

SCB-HK, jointly with its subsidiary, Standard Chartered Bank Malaysia Berhad, are the claimants, and the two are represented by London-based law firm, DLA Piper UK LLP. The claimants say that the outstanding debt continues to accrue at the daily rate of $11,593.14 (Sh18.8 million).

Those sued in the matter before the Queen’s Bench Division Commercial Court are IPTL, VIP Engineering and Marketing and Pan African Power Solutions (PAP).

VIP was the minority shareholder in IPTL with a 30 per cent stake before recently relinquishing its ownership to PAP for a pay cheque of $75 million (Sh120 billion).

The claimant, apart from seeking the recovery of the outstanding debt, also challenges the manner PAP acquired IPTL and the withdrawal of some $122 million (Sh201 billion) from the Bank of Tanzania (BoT) escrow account. The purchase of IPTL by PAP through the VIP share swap is also being investigated by the parliamentary Public Accounts Committee (PAC) and the Prevention and Combating of Corruption Bureau (PCCB).

According to court documents seen by The Citizen yesterday, the Standard Chartered Bank (Hong Kong) and Standard Chartered Malaysia Berhad are seeking orders to declare the said sale and takeover of IPTL by PAP as null and void.

They are also asking for orders to enforce the original IPTL ownership agreement and all other legally binding agreements that followed the putting of the power plant in Dar es Salaam under receivership for some period. The claimants further want the court to order a refund of all the escrow money that was withdrawn to pay VIP and others, arguing transference of the funds from BoT was not legal. They also claim that the $122 million escrow monies were illegally paid to PAP because the latter wasn’t a party under the Escrow Agreement signed between the Tanzania government and IPTL.

According to the plaint, in relation to the Security Deed, the Charges of Shares, and the Shareholder Support, SCB-HK seeks, among other things, an injunction restraining defendants, save with their written consent of Ms Martha Renju as IPTL’s administrative receiver, from causing the disposal of or dealing with shrinking in value of any item of Secured Property (including, without limitation, IPTL’s rights under Escrow Agreement or in relation to the Escrow Account and if any funds payable to IPTL pursuant to the Escrow agreements or Power Purchase Agreement)

The claimants also seek an injunction requiring IPTL, VIP and PAP to take all such steps as lie within their power to cause the payment of any and all sums standing to the credit of the escrow account properly payable to IPTL under the Escrow Agreement and which, as between IPTL and SCB-HK, are payable to the latter under the security deed to be paid to the Kong based bank.

The claimants further want an injunction requiring IPTL, VIP and PAP to pay SCB-HK all sums formerly standing to the credit of the escrow account which, as between IPTL and the bank, are payable to the Hong Kong based bank and which have been paid to IPTL or VIP or PAP. If the Share Sale Agreement (SAP) between VIP and PAP has been completed, the claimants want on order requiring PAP forthwith to re-convey its shareholding in IPTL to VIP Engineering.

Alternatively, the claimants also want an order requiring VIP forthwith to deliver to SCB-HK all sums already received by it under the Share Sale Agreement.

The Citizen: