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MPs fight govt over car loans

At least 18 members of Parliament are seeking court intervention for allegedly going seven months without receiving their salaries due to what they call misunderstandings between Treasury and CDH Bank over vehicle loan payments.

Dedza South parliamentarian Alekeni Menyani confirmed to Weekend Nation on Wednesday that the affected legislators—from opposition PP, MCP and UDF—have decided to seek court redress after their pleas regarding the issue seem to have been falling on deaf ears.

Parliament in session
Parliament in session

“We are very broke and heartbroken. We have been engaging government to intervene in trying to make the loans manageable as we were promised at the beginning, but we are not being assisted.

“So, yes, we have engaged a lawyer to that effect. It’s probably the only way to rectify the inconveniences this has brought in our lives,” she said.

He, however, refused to shed more light on the matter, referring the paper to Parliament secretariat.

His frustrations were echoed by MP for Mzimba South East Chihaula Shawa: “I have to negotiate with the bank every time I want to draw my salary. This is inconveniencing.”

A member of the parliamentary staff, who spoke on condition of anonymity, told the paper that the issue dates back to last August when government allowed each MP to get a K24 million loan from commercial banks.

According to the source, government made a special arrangement with CDH Bank to help facilitate the loans for the 18 MPs, as could not access them from other commercial banks in the country.

“In the initial communication between the two (government and CDH), it was agreed that the bank would loan the money to the parliamentarians on the basis that government would repay half of the loans with the MPs servicing the remainder,” said the source.

But in a twist of events, government is reportedly failing to keep its word on the deal, prompting the bank to deduct hefty sums from the parliamentarians’ salaries in its attempt to recover its loans.

Parliament spokesperson Leonard Mengezi confirmed the development, saying the matter has been referred to Treasury.

“We are aware of the issue at hand. The concerned members indeed brought it to our attention, but there is little we can do as a secretariat; as you know issues of money are handled by the Treasury,” he said.

Minister of Finance Goodall Gondwe said in an interview on Thursday he was not aware of the matter, but said he would sort out the misunderstanding.

CDH service manager for Lilongwe Branch refused to comment on the matter, saying he is not allowed to divulge customers’ details to a third party.

But a letter from the bank to secretary of Treasury dated February 24 registers a concern over the manner in which the loan scheme is running.

“We have arrears by the Accountant General from December 2014 amounting to K34 292 184 84 and January arrears by the National Assembly amounting to K6 367 984 47.

“Please note that the bank deducts all loan repayments from MPs salary accounts…and in turn credit the accounts with claims received from the Accountant General and National Assembly,” reads part of the letter signed by the manager for the bank’s Lilongwe banking centre Benson Jambo.

It is estimated that the MPs personal motor vehicle loans, will cost taxpayers about K2.3 billion by the end of the current National Assembly in 2019, as government is expected to subsidise half of each MP’s loan as well as foot 72 percent of the of interest on the credits. n

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