Editors PickNational News

Cash-gate Exclusive: K4.6 billion vanish in 3 months at tourism ministry

Nearly K4.6 billion (about $11.5m) is suspected to have been looted from Malawi’s Ministry of Tourism between July and September 2013 through dubious payouts that have also led to the arrest of two senior officials at the ministry, The Nation investigations show.

The Nation

has reviewed more than 90 cheques and other documents covering the period between April and September 2013 as part of our investigative project into Capital Hill cash-gate.

During the six-month period, the ministry paid out more than K5.8 billion (about $14.5m), of which K363 million (about $907 500) was paid between April and June 2013 whereas K5.5 billi (about $13.7m)on was paid between July and September this year.

Of the K5.8 billion that the ministry paid to various suppliers of goods and services during the six months, authorities suspect that K4.8 billion was looted, largely through suspected fraudulent transactions involving 44 private companies (see below for details of payments).

Of this loot, K4.6 billion was ransacked between July and September this year and the remaining K322 million vanished between April and June 2013.

Arrest of the ministry’s PS

Authorities have deemed these payments suspicious, prompting official investigations that have led to the arrest of the ministry’s principal secretary Tressa Namathanga Senzani on October 21 and chief tourism officer Leonard Kalonga on October 17 this year.

Namathanga was arrested for instructing the ministry “to make payments in favour of her company, Visual Impact, for no service supplied or offered to government”, according to the Anti-Corruption Bureau (ACB).

On the other hand, said ACB, Kalonga is suspected to have “corruptly employed the services of various people owning companies and defrauded Malawi Government of large sums of money.”

Of the 44 firms that may have dubiously benefitted from the Tourism Vote, most of them are construction companies.

We have also established that of the K4.8 billion suspected to have been looted, K4.5 billion went through the construction firms.

The dominance of the construction clientele is also curious for a ministry whose core business is “development and promotion of tourism, conservation and management of wildlife, preservation and promotion of national heritage.”

The ministry’s only planned construction projects, according to the 2013/14 output-based budget document, were continued construction of electric fences around Vwaza Wildlife Reserve and Kasungu National Park, a handful of office blocks, 3.1 km access roads at Senga Bay in Salima and other small development projects whose budgets are decimal fractions of the billions that have been paid out of the Tourism Vote within six months.

Transactions as indicated by investigators

Apart from the suspicious nature of the transactions as indicated by investigators, our investigations raised three questions;

—First, in the 2013/14 national budget, the Ministry of Tourism was allocated K3.7 billion, of which K2.5 billion was development expenditure whereas K1.2 billion was recurrent. Now, if the ministry has already spent K5.5 billion in the first quarter of this financial year—roughly K1.5 billion more than its annual allocation—how will it sustain itself to the end of the financial year in June 2014?

—Second, given that its development budget for the fiscal year is K2.5 billion, how has it managed to pay contractors nearly double the amount nine months before the financial year is out?

—How possible is it for any major construction project worth billions to be completed within three months and payments made within such a period?

Rachel Zulu, who was Minister of Tourism during the six months period we have reviewed, said in an interviewon Monday she had no idea about what happened.

Asked what she was doing at the ministry if she did not have an incline of what was happening there, Zulu said Cabinet ministers do not sign cheques and she cannot, therefore, be asked about her culpability.

Solution to the puzzle

But a well-placed senior civil servant, speaking to The Nation on Monday on condition of anonymity, appeared to provide a solution to the puzzle that has officially remained unsolved.

He said: “These people do not steal directly from the annual allocation to the vote. What happens is this: People with Ifmis rights get into the system, transfer the amount they want—say K1 billion—from Account Number One into the vote, say Tourism; then they facilitate the printing and signing of cheques through a syndicate.

“Once those cheques have been cashed from the bank, the transaction—transfer of money from Account Number One to the vote they want to steal from—is reversed and then deleted from Ifmis. So, you see, the allocation to the ministry remains intact. That is why so many billions can be paid from a vote whose budget allocation is billions of kwacha less,” he said.

The second tactic, added the senior government staffer, is the notorious instruction to the effect that commercial banks must always honour all government cheques from any of their branches for any amount without any limit on behalf of the Reserve Bank of Malawi (RBM).

Our investigations reveal that during the month of April, K42 million was paid from the Tourism Vote. Of this, K33.5 million paid to two companies is suspected to have been dubious.

In May, about K211 million was paid out, out of which K199 million to five companies cannot be justified.

In June, the ministry paid out K110 million; but an amount of K90 million to eight firms cannot be supported.

In July, K259 million, of which K191 million went to eight companies may have been suspiciously paid.

The mother of all the payments under review was K4.7 billion in August, of which authorities say K4.3 billion may have been looted through dubious payments to around 30 firms.

Out of the K550.5 million paid out from the vote in September, K14.4 million paid to one company is suspicious.

Our sources at ACB, RBM, the Ministry of Finance and the Ministry of Tourism, told us that authorities are still trying to find out what services the ministry was paying for in a space of six months.

List of suscipicious payments made at ministry of tourism

In month of April total payments were K 41,732,565.48. Questionable payments are

Kanengo Building Contractors K20,139,840.00

WEK Construction K13,428,560.00

A total of K 211,370,145.44 in payments was made in May 2013. Questionable payments are

Afro Oriental K128,400,756.43

W G Construction K18,672,508.80

Madula Building Contractors K17,233,948.80

Friendly General Suppliers K17,486,471.30

Tower General Dealers K17,576,460.12

K 110,196,707.38 in payments were made in June 2013. Questionable payments are

Tapita Building Contractors K18 567 821.48

Domekis Construction K16 301 376.38

Afro Oriental K13 624 125.12

R C Commodity Suppliers Ltd K9 629 636.20

Tower General Dealers K9 014 840.00

Shajira General Dealers K8 914 513.40

Gratho Investments K8 744 394.80

Ziuya Construction K5 400 000.00

K259 075 880.43 was disbursed in July 2013. Questionable payments are

Hury Civil and Building Contractors K 75 941 304.94

Kanengo Building Contractors K 27 359 630.43

WG Construction K 24 236 430.38

WEK Construction K 21 860 466.27

Megan Construction K 17 433 890.56

Cross Marketing K9 739 154.29

Standard Freight K8 109 573.36

Hardline Construction K7 395 431.20

Out of K 550,523,366.63 payments in September 2013 about K 520 million went to Automotive Products ltd. Questionable payment was

F J Construction K14 423 366.63

Month of August saw total payments of K 4 720 404 304.44. Questionable payments are

Vihama General Dealers K20 383,276.60

Tapita Building Contractors K9,600,000.00

Ziuya Construction K9,656,652.40

Business Advertising Agency K11,260,450.00

Afro Oriental K11,343,360.00

Cross Marketing K14,439,966.50

ZTC Civil Engineering K15,560,032.50

Exploration K16,750,600.00

Standard Freight Services K60,402,469.70

Sky Civil Engineering K18,987,040.78

Clive Engineering Company K20,800,078.61

Visual Impact K63,542,083.30

Compu Net works Limited K30,654,078.61

Covs Landscape Recreation and Nursery K30,965,868.40

Protem Civil Engineering K81,763,250.00

Carmu Civil Engineering K84,963,341.14

Faith Construction Company K105,973,548.32

Zozama Civil Engineering K77,696,014.00

Makhausi Construction K135,413,930.24

Walusako General Dealers K78,649,120.89

Wymbansu General Dealers K40,953,287.47

Sky Blue Construction K42,656,788.00

Pawooh Logistics K44,520,682.89

Megan Construction K131,794,051.21

Kanengo Building Contractors K167,791,703.20

W G Construction K313,999,668.69

Hurry Civil and Building Contractors K60,111,742.00

Mchemani Civil Contractors K72,985,640.98

Image Investments K516,764,228.54

Dan Civil Engineering and

Building Contractors K401,088,915.75

Stadal Building Contactors K712,308,766.60

International procurement Services K849,598,097.06

O G Construction K396,023,569.10

 

—Tomorrow read about how the Ministry of Local Government and Rural Development was looted

Related Articles

13 Comments

  1. How much money is left in the Tourism vote? When these thieves are brought to justice, my prayer is that they will be sentenced to a life time of extreme poverty, among other punishments.

  2. Am speechless and very disappointed. Were these people overcame by demons? How would one sane person explain all such payments?

  3. Diz pipo deserves to rot in hell wit no sympathy.Many parks has bin struggling due to under funding yet diz heartless pple were buzy looting.Ironically it is diz same pple hu feeds lies 2 de president on selling Liwonde National park on false pretex dat govt has failed to run it due 2 lack of funds!

  4. Inu a Nation, vote nchani kodi? Nanga vault?

    I find it annoying kuti media house ipange repeat zolakwika so many times without noticing kuti zavutapo apo! Shame!

  5. We may have all the excuses we want but I think Malawi lacks strong leadership. Even if the leader is not part of the looting, the fact that these kinds of fraud are happening at such terrible, does not paint a good picture of our leadership. The question becomes then: Is our leader on top of things? Is the leader really aware of what is happening in this country? Now to add salt to injury, we were told that our leader is receiving death threats. I know it was to buy sympathy but the downside is that it even raises more question if our dear leader really is leading the country. We are in mess that requires devine intervention.

  6. This Joice Banda’s own invention of governance. Blame no one but Joice and if there is anyone who should be behind bars first, is Joice Banda.

  7. Squeez them alittle they will start talking, my lay mans intuition is telling me that one can only behave with this kind of rampant carelessness if they know that somebody of greater influence has their back, this is a bunch of well wishers donating money to PP, connect the dots, it’s that simple!!

  8. My simple question to PP is. Was all this done under the DPP government? Who is in conrol of Malawi right now? It is a pity that K5 billion vanishes in the hands of civil servants and politicians while Malawians suffer at Kamuzu Central Hospital. We can no longer trust Joyce Banda and if we are genuine Malawians and if we pay tax, we should simply vote Joyce Banda out. The constitution should be change to allow the removal of president in times like these. She is currently untouchable. We are still waiting for big fish. Such large sums of money cannot just vanish like that without the blessings of somebody up there.

  9. Malawi police, please you know the owners of these companies, Why is it taking so long to bring these people to court? You are delaying the process to give them room to run away, then you should blame innocent people for your an professional approach.
    If I were a high court judge, I would handle these cases in 3 hours maximum. You are busy looking for other suspects, leaving those already nabbed strategizing on how best to distort the evidence. If our police is not capable of handling these cases, the best is to drop all the charges, than wasting the little resources which we have now. To compensate these people will turn the government bankrupt.
    Please my fellow Malawians, lets not bit about the bush. Whoever is involved, must be brought to justice regardless of which party he/she belongs to.

  10. Who in their right mind would authorise such payments. Koma anthu inu muli ndi consious? I dare say this is just a tip of the iceberg. What every one would like to know is chimawalimbitsa mtima ndi chani. Zinafika pokoma mpaka kupitilisa annual vote for the whole ministry in just one quarter. We will never develop as a nation with such type of greed and selfishness. Tafika posalila mpaka a twat like Zuma can make jokes about our state of development. It should never be like this but we are where we are chifukwa cha khalidwe ngati limeneli

Back to top button