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African Barrick Gold Mine faces multimillion dollar suit

the Guardian (Tanzania)
December 25th, 2011

Afrcan Barrick Gold (ABG) faces a multimillion court battle following its draconian decisions taken two years ago to freeze payments to Mwanza based firm, Simba Pipe Line, under the allegations of frauds.

In 2009 ABG suspended all suppliers who were supplying goods and services at its Buzwagi Gold Mine, claiming that it had detected serious frauds in the supply chains, and ordered internal investigation to take place immediately.

Two years after the inquiry report was issued, no any supplier was taken to court to answer charges of frauds, but one company has been forced to close down its operations in Mwanza after failing to service the debt it borrowed from various banks.

While this is happening ABG has resumed business with all the suppliers it claimed did business fraudulently with its Buzwagi Gold Mine, raising a concern whether the claims were part of the conspiracy to punish some suppliers in Lake zone or not.

Simba Pipe Line which was forced to close down after ABG froze its $1 million payments in 2009 has never received any official inquiry report stating how it fraudulently traded with Buzwagi as claimed by ABG headquarters in Dar es Salaam and Johannesburg.

“We have not been charged by ABG before the court of law or being shown the so called evidence, but our payments have been frozen for two years now...we think this was a smear campaign to ruin us financially.” An official from Simba Pipe Line who declined to named because he is not the authorised spokesperson told reporters in Mwanza.

Following the move, Simba Pipe Line has hired lawyers in Dar es Salaam in order to file civil suits against ABG in which the Mwanza based firm want the London listed firm to pay nearly 2 million including interest rates, and other losses suffered by the firm during that period.

The Mwanza based firm says it has reached the decision to file the suit after various attempts to recover its billions failed, adding that demand notice has already been sent to ABG informing the latter that it faces a court battle should it fail to pay the amounts within the given period.

Simba Pipe Line Ltd was among the top suppliers that supplied goods and services during the construction of $400 million Buzwagi Gold Mine, but was blacklisted in 2009 after ABG officials from headquarters claimed that they detected some fraudulent dealings.

After the move, Simba agreed to wait for six months pending the outcome of the internally initiated inquiry initiated by ABG, before making any move.

By Mid 2009, Simba wrote officially to ABG stating clearly that since the investigation was conducted and nothing concrete came out, it therefore needed to be paid the pending amounts.

In a verbal response, ABG said payments would be released soon after verification of various invoices was completed and approval obtained from headquarters in Johannesburg.

Two years down the lane neither Dar es Salaam office nor Johannesburg headquarters has issued any payments, forcing the Mwanza based firm to close down its business after failing to service bank loans as well paying various suppliers.

“The facts that some of our competitors who were also accused of frauds have been okayed to trade with ABG, while we are not been paid or even taken to court if there’s really credible evidence shows that there was a fishy motive behind the entire process.” The official from Simba told journalists in Mwanza.

The efforts to contact ABG’s Senior Vice President, Deo Mwanyika proved futile after his phone kept ringing without being answered for the whole day on Friday.

But a senior official from Buzwagi Gold Mine who spoke under the conditions of anonymity because he is not authorised to comment on the company’s affairs said, “We know the debt...its genuine debt because the goods were received, but I can’t understand why ABG has declined to pay the amount.”


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