Government hunted in k187m scam

Tables have turned in the K187 million (US$415 556) education scam, with the hunter—government—becoming the hunted now.

Weekend Nation has established that some acquitted suspects in the education scam—in which government paid the hundreds of millions for school projects that were never completed in the late 1990s—have now gone after Capital Hill through courts to demand multibillion kwacha compensations related to their arrests and prosecutions.

The complainants—who are claiming a K12 billion (US$26.7 million) payment for false imprisonment, defamation, breach of contract and malicious prosecution—include Greseldar Jeffrey and Brian Kachingwe Phiri, the building contractors who were  in 2000 accused of defrauding K56 million from the ministry through undone or uncompleted school projects.

Their case was part of a larger scam that saw K187 million go down the drain at the ministry. Based on the exchange rate of about K46 to the dollar in 1999, that amount would be roughly $4 million, which translates to K1.8 billion at today’s conversion rate of about K450 to the dollar.

This means if the complainants are successful with their claim, they could take home roughly seven times what government lost in the education scam.

Documents filed at the High Court in Lilongwe indicate that Jeffrey, Phiri and two deceased civil servants who worked under the ministry have dragged government to court on behalf of the Anti-Corruption Bureau and the Auditor General.

The complainants accuse the Auditor General’s office of defaming Jeffrey in its audit report of March 2000 by alleging that her business connived with a divisional education office in Kasungu to defraud government.

Following the release of the report, says the statement of claim, Jeffrey and Phiri were arrested, had their property seized and bank accounts frozen for 11 years.

“As a consequence, the plaintiffs were injured in their reputation, were falsely imprisoned, maliciously prosecuted and denied of their liberty,” it reads.

During the 11-year trial, the plaintiffs answered charges of corrupt practices with a public officer, obtaining money by false pretence, theft, uttering false documents, corrupt use of official powers, forgery and making a false warrant for money.

But they claim the charges were brought up “maliciously and in bad faith” with the motive to damage Jeffrey and Phiri’s businesses.

They further accuse the ACB of fabricating evidence to the effect that Jeffrey and Phiri bribed the two deceased government officials—Phillip Kaphikire and Brighton Chakhaza.

“The plaintiffs faced the fear and anxiety of a groundless prosecution…suffered severe psychiatric reaction as a consequence of their arrest, false imprisonment and malicious prosecution.

“This has resulted in post-traumatic stress and disorder and the deaths of [Kaphikire and Chakhaza],” claim the plaintiffs in the court documents.

And making a case for loss of property and damage to their property for 14 years after their trial commenced,  the complainants,  who are being represented by lawyer Ralph Mhone of Racane Associates, want government to pay the complainants K11 456 522 417.00.

The amount  is being claimed in loss of business of May 7 2012, loss of interest and income on cash profits, loss of properties rental income, loss of principal and interest amounts from bank accounts whereas loss of property in form of a piece of land in Blantyre and improvements thereon has been computed at K41 million (US$91 111)

The statement of claim, filed in December last year, also states that Jeffrey lost an estimated K14 275 971.12 following government’s order to stop payment of a cheque and balance for completed work at Msalura Community Day Secondary School totalling K638 342 060.

In total, the plaintiffs are demanding a sum of K12 135 984 477 plus action costs.

But arguing in defence of government, the Attorney General—according to documents we have seen—contends that there was reasonable cause and suspicion to arrest the plaintiffs and that all evidence brought against them was legitimately obtained, making the arrests lawful.

According to Mhone, the court is yet to set a date for hearing of the case as the State has asked to re-submit its defence arguments.

Spokesperson for the Ministry of Justice Apoche Itimu could not say when the State would file the defence arguments, saying she needed to consult.

“I can only confirm that the matter has passed a mediation process and is now ready for trial,” she said in an interview yesterday.

As many as 55 people were implicated in the scam, but only four—including former principal secretary for Education Sam Safuli—were convicted and jailed, although two of the convictions were later set aside by the Supreme Court of Appeal.

The rest of the suspects, including former vice-president Cassim Chilumpha, civil servants and several contractors, had their cases dropped or were acquitted due to lack of sufficient evidence.

Lawyer Justin Dzonzi said although there were many suspects in the case, it would be difficult for everyone implicated in the scam to sue for compensation and win their case.

Dzonzi said ‘suspects’ would have to understand the nature of the case before making a claim.

“I don’t believe everyone arrested in connection to the case could be entitled to sue for compensation unless their case borders on malicious prosecution. In as far as this case is concerned, not everyone was maliciously prosecuted,” he explained.

He stressed the need for State prosecutors to weigh strengths and weaknesses of available evidence in cases before they seized the suspects’ property.

His view was shared by Chancellor College law professor Edge Kanyongolo, who also doubted if everyone connected to the scam is legible to compensation.

“These are civil cases and are dependent on facts. It is, therefore, difficult to conclude that everyone that sues will have a good case in this scenario,” said Kanyongolo.

How the scam was discovered

The K187 million education scandal was exposed by an audit which revealed a breakdown financial control and internal check systems in the ministry.

Of the convicted four, Safuli was sentenced to two years imprisonment for aiding and abetting theft of K100 000.

He was convicted together with managing director of Tapempha Building Contractors, Esther Kathumba, who got four and two years imprisonment for theft of K596 802 and attempted theft of K1 999 920, respectively, from the ministry.

Her husband, Henry Kathumba, who was them managing Khristu Nafe Building Contractors, was slapped with a two-year jail term for theft of K100 000 which he collected from the ministry.

Snowden Joya, a quantity surveyor in the ministry, was sentenced to three years imprisonment for forging six certificates for completion of work for projects that were never finished.

But eight months after the convictions, the Supreme Court of Appeal set aside Safuli and Jiya’s convictions and quashed their sentences.

The court also quashed theft charges against the Kathumbas and substituted them with theft by false pretence.

Additional reporting by Watipaso Mzungu