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Greenbelt rot

The Office of the Director of Public Prosecutions (DPP) says it is ready to go to court on the K2.4 billion fraud that took place from 2018 to 2020 at Nchalo GreenBelt Limited (NGBL) after reviewing the 2022 forensic audit report on the latter.

In an interview on Tuesday, DPP Masauko Chamkakala said: “The DPP’s office has finished reviewing the audit report and case docket. We are now verifying the payments and payees. The matter should be in court soon.

Verifying issues: Chamkakala

“As per protocol, we will check on the progress made by the Anti-Corruption Bureau (ACB) and see which areas we can focus on.”

The National Audit Office (NAO) report implicated at least 43 suppliers and 61 individuals who received payments from NGBL without providing proof of goods or services they rendered.

It also identified 35 individuals, including the chief executive officer, board members, and directors, who the report accuses of neglecting their duties, leading to the alleged misappropriation of funds.

The Agricultural Development and Marketing Corporation (Admarc) had entered into an agreement with NGBL to pre-finance production of 4 700 metric tonnes (MT) of cotton seed with a $4.5 million (K7.87 billion at the current exchange rate) loan facility from the Export Development Fund (EDF).

As of December 31 2020, Admarc had paid K2.5 billion, while NGBL had delivered seed valued at K92.2 million, leaving a balance of K2.4 billion.

ACB spokesperson Egrita Ndala was yet to respond to our questionnaire on what the bureau had done after Fiscal Police in Blantyre arrested three former NGBL employees for allegedly misappropriating K2.4 billion.

The suspects were identified as Imran Malidadi, 48, from Masinde Village, Traditional Authority (T/A) Malemia in Zomba District, who served as human resources and administration manager; Richard Nkhwazi, 46, from Bonje Village, T/A Wasambo in Karonga District, who was the general manager; and Tozer Khonje, 77, from Nthunga Village, T/A Mwamlowe in Rumphi District.

National Police spokesperson Peter Kalaya said on Tuesday in an interview that the law enforcers are also looking for former GreenBelt Authority (GBA) CEO Henri Njoloma in relation to the same issue.

In an interview last week, GBA CEO Eric Chidzungu explained that the previous GBA board sanctioned the forensic audit and that the report was subsequently submitted to the office of DPP for action.

According to findings of the forensic audit report which Weekend Nation has seen, Admarc engaged local farmers who lacked experience in managing a commercial project of such magnitude.

Additionally, the report says no feasibility study was conducted for the multi-billion kwacha project.

Reads the report, in part: “The initial agreement was for working capital only, yet there were no structures in place on the ground. The project was initially phased for 100 hectares but failed catastrophically due to floods, among other factors,

“However, Admarc advised NGBL to upscale the project to 1 000 hectares despite the initial phase incurring losses.”

The findings also indicate that there is no evidence to suggest that EDF conducted a credit or risk assessment before allowing Admarc to channel funds to NGBL.

It reads: “Credit or risk assessment is mandatory and obligatory for any financier before granting a facility of this magnitude. It is unclear why this critical exercise was not performed by EDF.”

EDF spokesperson Deliby Chimbalu asked for more time before commenting on what action, if any, the institution has taken.

The audit report also revealed several alleged fraudulent activities, including the procurement of plant, property, and equipment, abuse of cashed cheques, issuance of fraudulent cheques without related paperwork, loan fraud, and fraudulent administrative expenses.

Other findings included alleged fraudulent procurement of fuel, irregular procurement of vehicle and machine spare parts, abuse of office, fraudulent allowances for chiefs, and fraudulent procurement of fertiliser, chemicals, seed, protective clothing, and labour costs.

Admarc spokesperson Theresa Chapulapula in an e-mailed response indicated that the State-owned company sued NGBL over the difference between the financed amount and the seed supplied, and the court awarded the company K2.2 billion in a 2021 judgement.

She said: “The matter is now at the enforcement stage, as the defendant [NGBL] does not have assets to satisfy the judgment debt. We are exploring other avenues of enforcing the judgement.”

Meanwhile, chairperson for Parliamentary Public Accounts Committee (PAC) Mark Botomani has said the committee is not aware of the existence of the report but that members will use relevant legal provisions to ensure that accountability is done.

Commenting on the issue, Centre for Social Accountability and Transparency (Csat) executive director Willy Kambwandira urged the DPP to expedite the process and ensure that individuals implicated in the looting are brought to justice.

Said Kambwandira: “It is deeply concerning that it has taken the DPP two years to conclude an investigation into the plunder at Nchalo Green Belt, despite a forensic audit clearly identifying the individuals involved. The lack of arrests so far undermines public confidence in the investigation.”

The report shows that two contracts were signed, the first in May 2018 for 1 200 MT and the second in September 2018 for 3 500 MT.

The late Admarc CEO, Margaret Roka Mauwa, and James Kaphale, director of administration and company secretary, signed on behalf of Admarc. General manager Richard Nkhwazi, and agriculture manager Tozer Khonje signed on behalf of NGBL.

In April 2018, Admarc applied for a $20 million (K35 billion) loan facility for crop produce trading and crop production through contract farming. However, on May 18, 2018, EDF board scaled down the facility to $4.5 million.

The initial loan facility agreement of $4.5 million between Admarc and EDF was signed on June 27 2018. EDF managing director Rodrick Wiyo signed on behalf of the fund while Mauwa and Harold Mwala signed on behalf of Admarc.

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