K20 bn ‘Bankgate’ suspect committed to High Court
The Blantyre Magistrate’s Court on Wednesday committed to the High Court a Pakistan national arrested on Tuesday on suspicion that he defrauded local commercial banks of K20.9 billion through loans.
Abudul Rehman was brought into the country on Tuesday and he immediately landed in the hands of Malawi Police Service Fiscal and Fraud Section who interrogated him for hours before the court declined to hear his bail application yesterday.
The High Court is expected to hear the bail application, but as of yesterday, according to our sources, Fiscal Police were still making further interrogations.
Head of Fiscal Police Isaac Norman said in an interview yesterday that the matter was committed to the High Court and Rehman remained in police custody.
Lawyers said yesterday that the matter is big and complex; hence, it was committed to the High Court.
The Director of Public Prosecutions (DPP) has taken over the matter, the officials disclosed.
Rehman, one of directors at Cotton Ginners Africa Limited before he left Malawi with his family in April, obtained loans using Cotton Ginners and placed some of the company’s assets as securities.
The businessperson was traced in Pakistan by Malawian private investigators with the help of Pakistani authorities and brought into the country to the relief of the banks that granted the loans and proprietors and directors of Cotton Ginners.
While Rehman was away, Cotton Ginners Africa Limited applied for bankruptcy at the Commercial Court in Blantyre, an application the banks challenged.
Rehman is believed to have remitted over $5 million (over K3.6 billion at the current exchange rate) in foreign accounts, according to an audit report by Audit Consult Advisory Services Limited dated July 23 2017, which is contained in court documents.
The major victim of the suspected fraud is Standard Bank Limited, which is owed K8 585 177 082, followed by Reserve Bank of Malawi’s Export Development Fund (K4 092 547 425), Ecobank Malawi Limited (K3 499 481 627), CDH Investment Bank (K4 476 302 691) and National Bank of Malawi (K250 000 000).
The total amount at stake is K20 903 508 825, but it has also been established that the total liabilities for Cotton Ginners Africa Limited is K23 656 808 338, with the company’s total assets pegged at K10 011 666 092.
The company requires K13.2 billion to return to solvency, court documents we saw indicated.
The local banks, in a move to recover their money and save their reputations, teamed up to object the bankruptcy application that remaining directors of Cotton Ginners filed at the High Court’s Commercial Court Division in Blantyre. n
