Witness names Cashgate beneficiaries


The High Court in Lilongwe on Tuesday learnt that the Financial Intelligence Unit (FIU) and Accountant General’s office were given a share of Cashgate proceeds in 2013 allegedly to sweep the public funds abuse scandal under the carpet.

Standing in the witness box in the K2.4 billion Cashgate case involving former Ministry of Finance budget director Paul Mphwiyo and 18 others, Anti-Corruption Bureau (ACB) investigator Clemence Tembo told the court that FIU—now Financial Intelligence Authority—was given K100 million while the Accountant General’s Department got K200 million.

Facing Cashgate charges: Mphwiyo

He said ACB discovered the beneficiary or distribution list of the proceeds in a drawer in the office of Cashgate convict and former tourism officer in the then Ministry of Tourism, Leonard Kalonga.

Said Tembo: “I found the list in the drawer of Kalonga with names of 18 suppliers. The cheque numbers and the money that was there were confirmed to be valid, but in the course of investigations, we discovered that some of the money was distributed to the departments.

“There was a K100 million which was distributed, but we don’t know where this money went because, in his own handwriting at the back of the printed list, K100 million was given to FIU, K200 million to the Accountant General’s Department.

“There was K100 million which was just signed but without indication of where it went.”

From the list Tembo referred to in court, which The Nation saw, K1.7 billion was indicated as payment to suppliers, but only K1.4 billion was distributed as per records.

Tembo’s statement was in tandem with what Kalonga, who was convicted on his own plea of guilty, said that there was a conspiracy to defraud government using forged documents and payment to bogus suppliers.

The account given by the ACB investigator is the first detailed description of how FIU, an institution responsible for detecting and preventing fraud, was found in a compromised situation.

Presiding judge Esmie Chombo adjourned the matter to this morning and the State is expected to parade another witness.

Mphwiyo and 18 others are charged with conspiracy to defraud government, holding property belonging to government, theft, money laundering, fraudulently issuing 24 cheques worth K2.4 billion, abuse of public office and usage of proceeds of crime.

Mphwiyo’s shooting outside the gate of his Area 43 residence in Lilongwe on the night of September 13 2013 is widely believed to have exposed revelations of Cashgate—the plunder of public resources at Capital Hill.

Former president Joyce Banda ordered a forensic audit undertaken by British firm, Baker Tilly, covering a randomly selected six months period between April and September 2013. The audit established that about K24 billion was siphoned from the public coffers through dubious payments, inflated invoices and goods or services never rendered.

In May 2015, a financial analysis report by audit and business advisory firm PricewaterhouseCoopers (PwC) also established that about K577 billion in public funds could not be reconciled between 2009 and December 31 2014.

However, the K577 billion figure was later revised downwards to K236 billion by another British forensic auditor.

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