The High Court of Malawi Commercial Division yesterday learnt that government two months ago repaid a K6 billion loan taken out by businessperson Shiraz Ferreira, who allegedly failed to pay it back.
Attorney General (AG) Thabo Chakaka Nyirenda told the court in Lilongwe that the development meant that Ferreira has no grounds to claim more money from the public purse.
Ferreira’s company, SF International, is suing the Malawi Government demanding $6.9 million (about K12 billion) in compound interest due to delayed payments on a $30 million contract it had with the Malawi Defence Force (MDF).
| Courtesy of Platform for Investigative Journalism
When the case up for continued hearing yesterday, Chakaka Nyirenda, during cross-examination of Ferreira, said that on May 22 2020, the government agreed to guarantee a K4 billion bank loan from FDH Bank for Ferreira.
The loan guarantee was signed by former minister of Finance Joseph Mwanamvekha and it was meant to help the Malawi Police Service buy public order vehicles. The money was part of contract number MPS/SB/22/11/2019 dated April 16 2020 between the Malawi Government, through the Malawi Police, and SF International Limited.
Chakaka Nyirenda said government paid the loan because it guaranteed it after Ferreira defaulted.
He asked Ferreira why he was charging the government interest for delays and pointed out that it took the businessperson five years to deliver on the MDF contract.
In response, Ferreira conceded the delays, but said his contract included clauses protecting him from liability in cases such as floods or war. However, he could not indicate what caused the specific five-year delays.
The AG also questioned the evidence Ferreira provided, arguing that his payment vouchers and delivery notes show a pattern for most contracts he got with the government were paid before delivery of the goods.
Ferreira told the court that the arrangement with MDF was different, saying they gave a verbal instruction that the radio items needed to be fitted onto Puma vehicles in a factory in South Africa.
Ferreira’s lawyer Shabir Khan is expected to start re-examining his client this morning.
Two weeks ago, the court heard that government overpaid the businessperson by more than $1.4 million (over K2.4 billion at current rate).
After conceding the excess payment following recalculation of figures, Ferreira attributed the error to the company’s accountant being his field of expertise.
Following the fresh calculations, the court learnt that the excess payment was $3 896 156.15 (about K6.8 billion), a development that compelled the AG’s office to file a counter claim against SF International.
