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Opinion

OPINION: HOW SOUTH SUDAN AWARDED LUCRATIVE DUTY PAID STAMP CONTRACT TO CORRUPT INDIAN COMPANY

HOW SOUTH SUDAN AWARDED LUCRATIVE DUTY PAID STAMP CONTRACT TO CORRUPT INDIAN COMPANY – MADRAS SECURITY PRINTERS PRIVATE LTD.

By Wol Deng Akot

Leaders of Madras Security Printers receiving elIndia 2013 Award(Photo credit: MSP)

August 29, 2020(Nyamilepedia) — On Friday 18th August 2017, the Undersecretary of Planning at the Ministry of Finance and Planning, Wani Buyu invited one Mr. P. Rajah Sunder Singh, the Managing Director of Madras Security Printers Private Ltd to come to Juba, South Sudan to, “finalize discussion on Smart Track and Trace System for Domestic and Imported (Stamp Duty)”. Four days after this invitation, the delegation from India landed at Juba International Airport and proceeded for a meeting at the Board Room at Ministry of Finance & Planning.

The delegation was received by high-level officials from the Ministry of Finance & Planning. Conspicuously present in the delegation was the representative of Madras Printers in South Sudan, Mr. Deepak Kumar Raj and little Eritrean businessmen called Semere Derar who described himself as South Sudan Country Representatives for Foreign Investors. On 24th August, 2017 the Ministry of Finance and Planning signed a Memorandum of Understanding with Madras Security Printers Private Ltd. On 29th August 2017, then Minister of Finance and Planning, Stephen Dhieu wrote a letter of “acceptance with no objection of offer; supply of Duty Paid Stamp with Track and Trace Solutions” to Madras Security Printers Private Limited. The letter also states that “African Development Bank had provided a grant of Three Million United States Dollars ($3 Million) to purchase hardware that would facilitate the operation of Duty Paid Stamp”. Two months later on 4th October 2017, Stephen Dhieu again wrote to then Minister of Justice and Constitutional Affairs requesting for “preparation of a contract to be signed between the Ministry of Finance and Planning and Madras Security Printers Private Limited for supply of Duty Paid Stamp with Track and Trace Solutions”. 

A day later on 5th October 2017 just before the launch of African Development Projects on South Sudan in 6th October, 2017, foreign directors of Madras Security Printers Private Limited together with their “local” partner and facilitator one Semere Derar walked away with a contract worth USD 9 Million (USD 3 Million to be paid by African Development Bank as grant and another USD 6 million to be paid by the people of the Republic of South Sudan) to a foreign-owned company. A deal made in heaven had been signed.

Nearly three years after the signing of this lucrative and highly sensitive contract that was meant to “generate revenues, prevent importers and manufacturers from evading customs duty and eradicate illicit trade in imports”, the Republic of South Sudan does not have a secure excise duty paid stamp that would have greatly improve the collection of non-oil revenues to help the Government of South Sudan to provide basic services such as healthcare, food and education to its citizens. 

Thanks to Deepak Kumar Raj and the Eritrean businessmen called Semere Derar with connection to the former Director General of African Development Bank for East Africa, Gabriel Negatu who facilitated the award of contract to Madras Security Printers Private Limited, the Government of South Sudan continues to lose billions of USD Dollars in non-oil revenues as a result of tax evasion due to lack of secure Excise Duty Paid Stamp. Yet Mr. Semere Derar, his partners at Madras Security Printers Private Limited and African Development Bank have pocketed nearly USD 9 Million paid to them by the African Development Bank as loan on behalf of the people of South Sudan. As South Sudanese, let us all remember that we will be paying this loan to African Development Bank when it is foreigners like Semere Derar and his Indian friends from Madras Security Printers Private Limited who received the money meant for South Sudanese.

It is worth noting that Mr. Gabriel Negatu was appointed as Director General, East Africa Regional Development and Business Delivery Office for African Development on 1st December 2016 by the current President of the African Development Bank, Dr. Akinwumi Adesina. It is to be recalled that Dr. Adesina was recently accused of “ignoring bank procedures and appoint old friends, many of them Nigerians to plumb African Development jobs and awarding them lucrative contracts without the due process”. It appears Mr. Gabriel Negatu seems to have learned from his boss when he influenced the award of this multi-million contract to his little known friend Mr. Semere Derar. This is the second contract that Mr. Gabriel Negatu has influenced after he pushed for the award of Juba Power Distribution System Rehabilitation to Ezra Construction and Development Group which is owned by another foreigner from Ethiopia, Mr. Ezra Ghebrengu who is the Managing Director of the company.

Typical of all foreign businessmen who have made it big in South Sudan, Semere Derar has been bragging to his Eritrean and Ethiopians friends that he literally runs the National Revenue Authority and that he is connected to most powerful individuals in South Sudan include the President of the Republic, Salva Kiir Mayardit.

Review and cancellation of the contract

Failure to honour contractual obligations

As mentioned earlier, South Sudan continues to lose billions of non-oil revenues due to tax evasion because of lack of secure excise duty paid stamp that should have been affixed on all consumable products being imported into and manufactured within the Republic of South Sudan. Madras Security Printers Private Ltd has failed to live upto its contractual obligations to “supply, install and commission a secure software based solution and supply high security excise duty paid stamp within a secure printing facility at the National Revenue Authority within four months (120 days) from the effective date of the signing of contract on 5th October 2017”.

Improper procedures

The award of this contract to Madras Security Printers Private was marred in fraud, illegalities and irregularities as proper procedures of awarding contract were not followed. The award of this contract was clearly influenced by Mr. Gabriel Negatu who used his position within the African Development Bank to award the contract to Mr. Semere Derar and Deepak Kumar Raj of Madras Security Printers Private Limited. This contract was not advertised so as to allow eligible and qualified South Sudanese companies to participate in this contract. Relevant government institutions such as Economic Division of the National Security Service were not involved in the award of this contract to Mr. Semere Derar and Madras Security Printers Private Limited. Had this been done, it would have allowed the National Security Service to carry out background check and vetting of Mr. Semere Derar and Madras Security Printers Private Limited. In addition, due to the sensitivity of this contract, it is critical that National Security Service is involved in the implementation of this project. Failure to involve credible institutions such as National Security Service is a serious threat to the economic survival of the Republic of South Sudan especially now that oil prices have drastically dropped as a result of the effect of Corona Virus Pandemic. Further investigations revealed that Madras Security Printers Private Limited is not registered with the Ministry of Justice and Constitutional Affairs. This is a non-negotiable and mandatory requirement for both local and foreign companies intending to do business in South Sudan. How was Madras Security exempted from this legal requirement?

Madras Security Under Criminal Investigations in Kenya

Madras Security Printers Private Limited is currently under criminal investigations by the Directorate of Criminal Investigations in Kenya for “conspiring with officials of Kenya Bureau of Standards (KEBS) to produce fake duty stamps that do not have track and traceability system as stipulated in the contract” in late 2018. According to court documents against the directors of Madras Security Printers, the stamps were found to have been made using ordinary adhesive papers instead of tamper-proof paper. As such the stamps supplied were found to be substandard and could easily be forged, duplicated and photocopied. As a result Kenya lost over one billion US dollars in lost revenues from counterfeit and illicit goods that were allowed to enter the country. South Sudan as country that is now trying to generate income from non-oil revenues cannot allow foreign companies such as Madras Security Printers and their agents such as Semere Derar and Deepak Kumar to mess up with our already struggling economy.

Dubious deals by the former Commissioner General of NRA

This is one of the many dubious contracts awarded by the former Commissioner General of the National Revenue Authority (NRA) Dr. Olympio Attipoe. Dr. Attipoe reportedly travelled to India in 2019 to meet with the representatives of Madras Security Printers Private Ltd. He was accompanied by Mr. Semere Derar. Credible sources have confirmed that the purpose of this trip was to share out the money that had been paid to Madras Security Printers Private Limited by the African Development Bank on behalf of South Sudan. Currently, Dr. Olympio Attipoe has sued the Government of South Sudan for what he calls “wrongful dismissal” as Commissioner General of the National Revenue Authority by the Minister of Finance & Planning, Salvatore Garang Mabiordit.

Empowering of Local Companies and Businesses

Since the independence of the Republic of South Sudan, foreign companies owned by Ethiopians, Eritreans, Ugandans, Kenyans and Indians have been the main beneficiaries of lucrative and even highly sensitive government contracts. This has generated a lot of anger from South Sudanese who feel that they are being denied opportunities in their own country at the expense of foreigners who have not contributed in any way to the liberation of the Republic of South Sudan. We are all aware of deadly xenophobic attacks that took place in South Africa where shops and businesses owned by foreign nationals were targeted and looted. The cause of these xenophobic attacks is the belief that foreign businessmen are being given business opportunities that should have been given to local businesses and individuals. For South Sudanese with nearly 70% of young population, we are sitting on a time-bomb unless the Government of South Sudan change this trend and start to avail businesses opportunities through contracts to South Sudanese.

Conclusion

Based on the above highlighted reasons, we are calling on the Minister of Finance and Planning, National Revenue Authority and National Security Service to terminate the award of the contract to Madras Security Printers Security Limited as per section 23.2 of the contract which clearly state that, “if the supplier fails to deliver the first batch of base marks (duty paid stamp) within four months of the approval of sample of Duty Paid Stamp” and if the company becomes insolvent or bankrupt”. It is clear that Madras Security Printers has failed to live up to their contractual obligations since they signed the contract three years ago on 5th October 2017.

Secondly, immediate investigations should be launched into the circumstances that led to the fraudulent, illegal and irregular award of this contract to Madras Security Printers Private Ltd represented by Deepak Kumar and their agent Mr. Semere Derar.

Thirdly, Mr. Semere Derar and Deepak Kumar should immediately be arrested and investigated for the role he played in the fraudulent, illegal and irregular award of this contract to Madras Security Printers Private Ltd. Mr. Semere Derar should also be investigated to reveal the names and identity of the individuals within the Office of the President, Ministry of Finance and National Revenue Authority that have been facilitating his criminal activities that including but not limited to bribery, fraudulent, coercive behaviour, blackmail, threats, intimidation and other corrupt practices. Mr. Semere Derar has openly been bragging to his friends that he is being facilitated and protected by the first family and powerful individuals within the Office of the President; hence according to him, “he is untouchable”. Mr. Semere Derar should be held accountable for invoking the name of the President and his family in his fraudulent and corrupt deals.

Fourthly, the African Development Bank should conduct its own internal investigation against Mr. Gabriel Negatu for his role in the fraudulent, illegal and irregular award of this highly sensitive and lucrative contract to Madras Security Printers Private Ltd and Mr. Semere Derer without due process in line with relevant procurement laws and regulations of the Republic of South Sudan. African Development Bank should understand that it owes answers to the people of the Republic of South Sudan especially details of USD 47 Million in grants and loans that African Development Bank has already provided to South Sudan for various infrastructural projects.

Finally, individuals who have been campaigning for the appointment of Stephen Dhieu as Minister of Finance and Planning to replace Salvatore Garang Mabiordit should now understand Stephen Dhieu is not the “Mr. Clean” that they have been bragging about. He is as equally corrupt, inept and incompetent and does not deserve to be re-appointed to the Ministry of Finance and Planning. How could he have allowed this contract to be signed and even facilitated it to be fast-tracked in record two days? Does this look like “Mr. Clean” to you? Please give me a break; “Mr. Clean” my foot!

Wol Deng Akot is an Investigative Journalist and Writer on Current Social, Economic and Political issues in South Sudan. Reach me on: wol.demariar@gmail.com


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