National News

Court adjourns K20bn bank fraud case

The High Court in Blantyre has adjourned a K20 billion bank fraud case involving Cotton Ginners Africa Limited (CGAL) to April 11 2022 after the State concluded reexamination of its fourth witness.

The State introduced its fifth witness Edward Mtulutsa, who is head of credit at Export Development Fund (EDF), a division of the Reserve Bank of Malawi (RBM). But the examination faced challenges as the State’s documents’ pages were not marked, which proved difficult for the court to be on the same page.

Parties to the case leave the court yesterday

The development compelled High Court Judge Sylvester Kalembera to order for the indefinite adjournment to allow the State to correct its files.

“When you are ready, you will call me,” he said. 

But about 30 minutes after the indefinite adjournment, Judge Kalembera came and found that the State was not ready with its files and directed that the matter will reconvene from April 11 to 15 2022.

Before adjournment, Mtulutsa told the court that on June 2016, EDF offered a working capital loan facility to CGAL amounting to $5 million (about K4.1 billion) to buy cotton. He said the company indicated that cotton price on the market was rising because of the low supply; hence, obtaining the loan.

“We looked at the capacity of the company and found that the transaction will generate foreign exchange and would create employment in the Shire Valley,” said Mtulutsa.

On February 8, Kalembera dismissed an application by CGAL to have EDF struck off the list of the parties in the K20 billion bank fraud case.

In the application, two former directors Abdul Rehman Abdullah and his wife Rizwana through their lawyer Fostino Maele argued that EDF had no legal mandate to lend money in 2016 because it had no licence at the time it extended the loan CGAL.

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. In the case, Cotton Ginners borrowed K8.5 billion from Standard Bank of Malawi plc, K4 billion from EDF, K3.4 billion from Ecobank Malawi Limited, K4.4 billion from CDH Investment Bank Limited and K250 million from National Bank of Malawi plc. n

Related Articles

Back to top button