Attorney General (AG) Frank Mbeta has directed the Public Service Pension Trust Fund to stop its process of buying an unnamed hotel after the Malawi Law Society (MLS) raised “grave concerns” regarding the acquisition.
And the Anti-Corruption Bureau (ACB) later followed up with an order for the fund to halt the purchase of the undisclosed hotel pending investigations.
A restriction notice signed by ACB acting director general Gabriel Chembezi, seen by NationOnline, stated that the bureau is investigating an alleged offence under the Corrupt Practices Act.
The notice to the fund’s principal officer reads: “Take notice that you shall not without my written consent or otherwise deal with or allow to proceed with the acquisition and/or purchase of any hotel using the Public Service Pension Trust funds.”
According to MLS, there are allegations that the hotel, which was priced at K47 billion last year, is now pegged at between raising fears that the value has been ‘inflated’.
Mbeta said in an interview yesterday that apart from issuing a statement, MLS wrote directly to his office, prompting him to stop the acquisition. The AG said he also instructed the Anti- Corruption Bureau (ACB) to investigate.
“So, it is under control, we will be going into investigations to understand what really happened,” he said.
In its statement released yesterday, MLS said it received several allegations that raise concern that the transaction is being concluded under suspicious circumstances, which could risk the financial security of the fund’s contributors.
The allegations include that the fund’s board initially resolved last year not to buy the hotel at the then price of K47 billion following expert advice from one of the fund managers who said the transaction was not viable.
But the decision was allegedly overturned after the seller’s financial adviser contacted another manager from the fund.
Another allegation is that critical safeguards were ignored with no independent due diligence by a hotel expert and no identified strategic partner.
MLS thus called for the “immediate suspension” of the transaction and asked ACB, Minister of Finance and the AG to investigate the proposed acquisition process.
The fund’s spokesperson Yamikani Sekeni said in a separate interview yesterday that the matter is being handled by competent authorities for their independent review and action.
“ACB, the Office of the Attorney General, the Ministry of Finance and the Reserve Bank of Malawi are all actively handling the case in line with their respective legal mandates,” he said. Treasury spokesperson Williams Banda did not pick our calls.
