The High Court of Malawi Commercial Division has ordered parties in Carbon Dioxide and Allied Products (Pvt) Limited (CDAP) to renegotiate the proposed reorganisation of the firm within 90 days.
In a judgement dated December 17 2025, Judge Chifundo Kachale also ordered the Reserve Bank of Malawi (RBM), as regulator of financial services, to establish why National Bank of Malawi (NBM) plc did not comply with RBM’s December 2022 guidance to restrict its shareholding in CDAP to 35 percent and not 46 percent in line with Capital Adequacy Directive of 2024. The regulator has 60 days to formally brief the court on the findings.
“For the avoidance of doubt, all irregular actions and decisions taken during the intervening period are validated [unless outright criminal in nature],” said the judge.
Kachale said any proposed agreement by the parties in CDAP, namely Crispin Ng’oma Trust and Kamoza Trust as first and second petitioner, respectively, and respondent CDAP as well as first cited party Lowani Munkhondia and second cited party NBM plc as secured creditor and all unsecured creditors, should maintain the contractual freedom used in negotiating the original memorandum of understanding (MoU).
The court also nullified board resolutions that diluted minority shareholding in CDAP, ruling NBM plc irregularly acquired excessive shares in the company.
Court records show that NBM plc became a shareholder in CDAP and acquired 46 percent shareholding after converting the company’s debt into equity. In a September 2022 MoU, CDAP is said to have had a right to buy off the bank’s shareholding by repaying the converted debt of $2 million.
The court also learnt that NBM plc appointed Lowani Munkhondia as administrator of CDAP after the parties agreed to restructure the shareholding of the company.
In his ruling, Kachale also ordered Munkhondia to provide a detailed written account of his tenure and the administrative actions taken in his capacity as administrator of CDAP in line with Sections 14 and 42 of the Insolvency Act to the petitioners within 45 days.
Reacting to the ruling, Bentry Nyondo, lawyer representing the first petitioner, welcomed the ruling and likened NBM plc to “a visitor who overstays his welcome and begins to change the menu in a home that is not his”.
But lawyer Patrick Mpaka, who represented NBM plc, CDAP and Munkhondia, said the judgement was “in some ways an unfortunate judgement because such out of court arrangements as were agreed in 2022 in this transaction and implemented between NBM and CDAP since then, as the High Court itself correctly observes at p.16 paragraph (l) of the judgement, are laudable and should be encouraged as they serve to promote commerce and industry while saving struggling enterprises from closing down in an economy”.
He said the legal team has provided a comprehensive review of the whole judgement to the bank and to CDAP and business decisions will be made in due course.
