Director of Public Prosecutions (DPP) Steven Kayuni has asked the Malawi Police Service to open criminal proceedings against some Admarc employees for their alleged involvement in financial mismanagement that drained about K330 million from the struggling parastatal.
In a let ter dated September 29 2022, the DPP asked Inspector General of Police Merlyne Yolamu to swiftly institute the proceedings against Agricultural Development and Marketing Corporation (Admarc) staff, managers and directors alleged to have been involved in the mismanagement of funds at the financially-struggling State produce trader.
Kayuni observed that the mismanagement of funds led to the institution’s underperformance in almost all its mandate portfolios and that it is an issue of breach of public trust.
He said: “There are issues that are of serious concern to the public, namely pilferage of the much-needed resources, insurance fraud, utter theft, abuse of office and fraudulent dealings in a corporate setting.
“Madam IG, it has to be highlighted that it is a cause of worry for a corporate body such as Admarc that draws its base of power from the public purse to continuously indulge in dubious motor vehicle insurance claims, medical insurance scheme, and mis-procurement leading to a huge leakage of public resources that would have otherwise enabled the amelioration of agricultural sector under takings in the country.”
Kayuni said the possible charges for the suspects would include and not be limited to fraud other than false pretences, misprocurement, abuse of office and insurance-related fraud.
I n a n i n t e r v iew yesterday, he said Admarc is on a sick bed, as such, he believed that what is happening at the institution is sabotage to the economy.
“A request to the Honourable IG on institution of criminal proceedings was the right legal route to take,” Kayuni said.
Yolamu yesterday said she would only be in a position to comment today as the letter in question was in her office.
F i n d i n g s o f a n external audit showed that Admarc lost about K330 million to fraud and abuse masterminded by employees through bogus car insurance and medical cover claims and dubious staff loan scheme.
On September 1 2022, Minister of Agriculture Lobin Lowe ordered the closure of Admarc and sent all staff on paid leave to pave the way for the redefining of the institution’s functions.
He said the Tonse Alliance administration had for over two years been analysing the best ways to restructure Admarc and that the Ministry of Agriculture and the institution’s shareholders concluded that the parastatal was failing to give desired results.
The 2021 Malawi Government Annual Economic Report shows that as at half year of the 2021/22 fiscal year, Admarc recorded a net loss-after-tax of K3.7 billion.
In January this year, Admarc appealed for a bailout to settle loans hovering around K58 billion obtained from various commercial banks which it said were hindering it from accessing finances to manage its operations.
Until 1987, Admarc was the sole buyer of smallholder produce, but in 2004, it was incorporated as a limited liability company with the government owning 99 percent of the shares. n