Court postpones RBM loans case

The Chief Resident Magistrate’s Court in Lilongwe yesterday postponed hearing of proceedings to commit to the High Court of Malawi a case involving former Reserve Bank of Malawi (RBM) governor Dalitso Kabambe and others.

Kabambe and others are accused of violating the RBM Act by extending loans to private companies.

However, the court could not proceed yesterday as Lilongwe chief resident magistrate Madalitso Chimwaza was unavailable, leading to the adjournment of the proceedings to a later date.

State lawyer Dziko Malunda and defence lawyers present did not grant interviews to journalists.

In the case, the State contends that the RBM Act prohibits lending to private entities or individuals, but the central bank allegedly extended loans worth about $5 million to companies owned by businessperson Leston Mulli. The loans are yet to be repaid.

Besides Kabambe, the other accused persons include former RBM deputy governor Henry Mathanga, Leonard Kandoje, Leston Ted Mulli, Joseph Khupe, Felton Mulli and Justin Fredson Likhunya. They were arrested in 2021 but subsequently released on bail.

The beneficiary companies involved in this case are Web Commercials Limited, FF Trading, Rock Ba Rock, Mulli Brothers Ltd, and JF Trading.

A copy of the committal certificate, which The Nation has seen, details at least seven counts against the accused persons.

The charges range from misprocurement contrary to Section 44(2) of the Public Procurement and Disposal of Assets Act as read together with Section 63 of the same Act.

Particulars of the offence read: “Kabambe and Mathanga being persons employed in the public service as the governor and deputy governor of the Reserve Bank of Malawi, respectively, on or about the year 2020, authorised the award of K1.8 billion contracts to Mitra Systems by paying 60 percent advance contract sum contrary to RBM’s bidding document instructions that they can only enter into a contract with a bidder who would receive the full payment upon delivery.”

Kabambe and Mathanga are also facing charges related to neglect of official duty. According to Section 121 of the Penal Code, during the period between 2019 and 2020, they allegedly failed to scrutinise the contents of contracts between suppliers and the Malawi government.

Leston Mulli is accused of fraud other than false pretence. Under Section 319A (d) of the Penal Code, Mulli allegedly deceived and defrauded the government by not importing fertiliser and failing to pay the money owed to RBM.

This action caused a substantial pecuniary detriment amounting to K1 401 989 682.71 through his company, Mulli Brothers Ltd.

Furthermore, Mulli and Leonard Kandoje face similar charges. Around 2019 and 2020, Kandoje allegedly deceived and defrauded the government by failing to import fertiliser and not paying the money owed to RBM. The pecuniary detriment in this instance amounts to K1 035 917 939.85 through Rock-Ba-Rock Company.

Mulli and Joseph Khupe are also accused of fraud other than false pretence. The particulars of the offense indicate that during the same period (2019-2020), Khupe caused a pecuniary detriment of K308 225 488.37 to the government through WeB Commercials Ltd.

Another suspect, Felton Mulli, in conjunction with Leston Mulli, faces charges related to fraud other than false pretense. Their actions allegedly caused a pecuniary detriment of K233 281 504.98 to the Malawian government through FF Trading.

The seventh counts of fraud other than false pretence, according to the document is for Justin Likhunya who, in and around 2018 and 2019, with intent to deceive and defraud caused a pecuniary detriment of K153 million to the said government by obtaining Letters of Credit from RBM to supply Fisp fertiliser.