The consignment that was worth Sh163.5m was sold off at Sh 50m mainly because the goods had lost value having been stuffed for a long time without due care.

 

 The auction is a blow to the Ministry of Livestock and Fisheries Development which proposed that the hides be given to the Prisons Department. In the past few weeks, the two government institutions differed over the matter.

 

The bone of contention was how to dispose off the 80 tonnes of wet salted hides, whose owners, according to TRA had failed to show up to claim the consignment. 

 

On Monday, this week a TRA advertisement notified the general public to turn up for a public auction of hides yesterday at the Ubungo customs warehouse. 

 

“This is to notify the general public that 80,000 kilograms of salted hides stuffed into 30x20 containers with marks and number MRKU 872120-2, CRXU 186178-4 and PONU 039949-4 will be sold in a public auction,” the statement indicated.

 

The development came a few days after the Ministry of Livestock and Fisheries Development in a letter dated 16th January with a reference number NB 87/247/01/20, commended TRA for the decision to donate the hides to Prison Department.

 

“The ministry commends the efforts and procedures taken by TRA in the disposal above mentioned hides by donating them to Prisons Department for their internal use,” reads the letter signed by A.P. Njombe for the permanent secretary.

 

“Once again the ministry would appreciate to receive information with regard to the owner of the said hides involved in the malpractice in contravention of section 200 and 203 of the East African Community Customs Management Act 2004,” it went further.

 

The letter similarly asked to know if the matter has been reported to the relevant state organs for investigations. 

 

The information requested is important to enable the ministry discharge its duties in accordance with the respective laws governing the subsector namely The Hides, Skins and Leather Trade Act No.18, 2008 and Animal Disease Act No. 17, 2003, it said.

 

On November 11, 2013 the customs department seized three containers of under-declared raw hides that were about to be exported. The hides were then valued at $150,000, according to TRA, but the traders indicated they were worth just $84,000.

 

Several weeks after the seizure, customs and excise deputy commissioner Patrick Kisaka told this reporter that the authority had failed to identify the owners of the seized containers and that the authority had plans to auction the goods.

 

 He said the raw hides worth Sh163.5m (about $1,000,000) were then being held at the customs warehouse awaiting public auction any time last month.

 

 “We proved that the containers contained raw hides and since the owners have not come to claim them we will auction them to recover revenue,” he stated, noting that the authority had not been able to trace the owners or their whereabouts.

 

In a letter dated 6th December with reference number TRA/CE/DCCE/TMU/OFF/02/13 addressed to the chairman of the Tanners Association and copied to the ministry, TRA said the goods would be sold by private auction, asking the stakeholders to bid for the consignment.

 

On 21st December 2013, the stakeholders, mainly the tanneries owner who had applied to buy the goods through private auction were taken to the site to view the raw materials at the Ubungo inland container deport. The exercise was led by TRA official Manjale Masare.

 

It was later revealed that the owners of the confiscated consignment wanted to buy the goods back through a private auction.

 

This paper learnt that SAK International Limited, the company under investigation for evading tax in the exportation of the said hides, reportedly offered the highest bid at auction.

 

Our investigations earlier revealed that the directors of the company flew to Pakistan just days after the goods were detained by customs officials in November.

 

 But on December 22 they sent one of their younger brothers back to Tanzania to coordinate the buying of those goods. During the site viewing, TRA official Masare who supervised the exercise publicly said that SAK International or its affiliates would not be allowed to participate in the auction - because the company was under investigation.

 

 “SAK International and its partners are automatically disqualified in this process … the investigation is still underway,” he said, affirming that allowing them to do so would contravene regulatory requirements.

 

But later it emerged that after coming back into the country, the SAK International official, through auction offered to buy the hides at Sh900 apiece, being the highest bidder.

 

After pressure and complaints from other stakeholders, TRA changed its plans, resorting not to sell the goods to the highest bidder, the company under investigations. This prompted several meetings among stakeholders.

 

During a meeting on 31st December, representatives from the Tanzania Tanners Association (TTA), TRA and the Ministry of Livestock and Fisheries Development agreed that the confiscated hides be donated to the Prisons Department. 

 

But the decision was later changed after the acting Commissioner General, Mr Rished Bade, stopped the process.  He told The Guardian “I stopped the process after realizing that some people with ill intentions wanted to take the hides after the donation to the Prisons Department.”