Escom blocks K4.9BN ACB probe

E lectricity Supply Corporation of Malawi (Escom) management has blocked the AntiCorruption Bureau (ACB) from probing a K4.9 billion payment standoff between the power utility and its suppliers, it has been learnt.

ACB confirmed that it sent a team to investigate the issue at Escom after seeing merit in a complaint, and that when the investigators went to Escom on September 28 2016, they were sent back.

Escom board chairperson Jean Mathanga told The Nation in an interview that she was aware that ACB had initiated an investigation at the power provider and she was also aware that an ACB officer was sent back.

Escom management’s action could be deemed as obstructing an officer of the Bureau which is a violation of Section 13 of the Corrupt Practices Act (CPA) and would land Escom management a seven year jail term and a K70 000 fine.

Reads in part Section 13 (b) of the CPA: “Any person that unlawfully hinders or delays the Director, Deputy Director or other officer of the Bureau in effecting entry into or upon any premises, boat, aircraft or vehicle, shall be guilty of an offence and liable to a fine of K70 000 and to imprisonment for seven years”.

The probe followed a complaint ACB received on September 21 2016 from an informant that there was political interference surrounding awarding of contracts as well as payment to suppliers to the tune of over K4 billion. The complaint added that goods were supplied without proper documentation and that procedures were not followed, a development that led to the resignation of Escom director of finance Betty Mahuka.

In an exclusive interview, M a t h a n g a s a i d E s c o m management informed her that the ACB officer was asked to indicate what exactly he was looking for at the power utility to facilitate cooperation from Escom management.

She said the ACB officer did not seem to know what he was looking for. Said Mathanga: “I am told that the ACB officer did not have the mandate of the ACB director and that he was not clear what he was looking for. Escom management asked him to tell them what he was looking for and the management should prepare those documents for him. Since then, he [ACB officer] has not been back.”

On whether her board would call for ACB help in the K4.9 billion payment standoff, Mathanga said: “Unless our process within Escom has failed then we can start looking for another body to come and investigate us.”

ACB senior public relations officer Egrita Ndala confirmed in an interview that ACB was conducting investigations at Escom and that to power suppliers management wanted confirmation that the officer had been authorised.

But she said the Bureau could not discuss the scope of the investigation to avoid prejudicing the process, adding that the investigation is still going on.”

A source at ACB revealed to The Nation that the authorisation of the Escom probe was done by ACB deputy director Reyneck Matemba. The source said Escom management sent back the ACB official upon consultations with the ACB director Lucas Kondowe who, then and now, is out of the country.

Matemba confirmed authorising the Escom file based on instructions he received from his boss, Kondowe as well as Section 8 (1) of the CPA that makes provision for a situation like this.

The said section reads: “If the office of the director is vacant or the director is absent from duty or unable for any other reason to perform the functions of his office, the deputy director shall act as director.”

Said Matemba: “When the director general [DG] was leaving for the USA last month, he called me while he was at Chileka Airport. He told me that there were a number of files in his offices in Blantyre and Lilongwe that needed to be acted upon and he advised me to act on all those files and the other matters.

“The file on Escom was one of those files. It was sent to me from his office in Blantyre and I acted on it by authorising the investigation. That was on the 28th day of September 2016. “

May be the DG didn’t have time to look at the files that were in his offices and see what they were all about. But again, even in the absence of a specific instruction from the DG, Section 8(1) of the Corrupt Practices Act makes provision for a situation like this, and to me, the provision is very clear.”

Matemba f u r t h e r explained that this was not the first time the DG had delegated his work to his office, adding that files and other matters sent to his office in Blantyre or Lilongwe are mostly re-directed to him.

He said: “This happens frequently and I am used to it. I cannot pretend that the work isn’t stressful and traumatic for me, it is. But I guess there is not much I can do about it. I just have to do the work.

“In any event, we are here to serve the people of Malawi. Of course, the situation is worse for me because of the absence of the director of corporate services and the director of legal and prosecutions. There is always a heavy work-load in front of me.”

Explaining the standoff between her company and the suppliers, Escom public relations manager Kitty Chingota said the matter was presented to Escom Board for consideration and approval to pay the suppliers.

“The matter was considered by the Board and it was thus resolved that the corporation had an obligation to pay for the materials which were delivered and issued on critical projects such as meter migration and new customer connections. “

Further, the procurements were verified by the corporation’s Internal Audit Department and based on the verification report, the corporation is in a position to pay the suppliers.

The corporation will pay the suppliers based on materials verified as per invoices submitted,” she said in an e-mail response. Chingota said the suppliers in question were contracted to supply and deliver materials to Escom and that the suppliers discharged their obligation by delivering the materials to Escom.

“Failure to pay the suppliers may result in penalties, including litigation so as to enforce payment. The transactions were not dubious at all as they were needed to satisfy an operational need and they were projectspecific in nature,” she said.