Bankgate: Court rebuffs Cotton Ginners
The High Court of Malawi has dismissed an application by Cotton Ginners Africa Limited (CGAL) to have Export Development Fund (EDF) struck off the list of the parties in the K20 billion bank fraud case.
In an application, two Cotton Ginners former directors, Abdul Rehman Abdullah and his wife Rizwana through their lawyer Fostino Maele argued that EDF, a division of the Reserve Bank of Malawi (RBM), had no legal mandate to lend money in 2016 because it had no licence at the time it extended the loan CGAL.
Maele told the court that his clients noted EDF was only issued an operating licence on September 20 2021, three weeks after RBM Governor Wilson Banda told Public Accounts Committee of Parliament that EDF had no licence during the past nine years of its operations.
Said Maele during preliminary application: “Under the Financial Services Act, it is a criminal offence for any person to operate a financial institution or offer any financial service without the requisite licence.
“The contract between EDF and CGAL [Cotton Ginners Africa Limited] for EDF to lend money to CGAL was blatant violation of a clear statutory prohibition which prohibits any person from offering financial services without the requisite licence. The contract between EDF and CGAL was, therefore, illegal and basically unenforceable at law.”
But in its submission, the State through Director of Public Prosecutions Steven Kayuni asked the court to dismiss the application in its entirety as it did not fall within the provisions that can influence a court to throw out a case.
Delivering his ruling yesterday in Blantyre on whether to dismiss or stay the trial on the ground that the contract which EDF and the company entered was illegal, High Court judge Sylvester Kalembera said it was premature to dismiss the case on those grounds.
He said Section 254 of the Criminal Procedure and Evidence Code stipulates that the closure of the prosecution should be done upon producing all the evidence during trial.
Justice Kalembera has since directed that the criminal trial should proceed from February 28 to March 4 2022 where the State will continue parading its witnesses.
One of the State lawyers Pirirani Masanjala said they are ready to parade 10 witnesses.
