K1.1bn deal shakes MPC

Malawi Posts Corporation (MPC) board of directors has ordered a forensic audit on how the financially crippled parastatal spent K1.1 billion from the sale of its building in Zomba.

In a written response to a questionnaire yesterday, MPC board chairperson Noel Mkulichi said the forensic audit follows the decision by MPC management to use part of the proceeds to make other payments without seeking the board’s approval.

He said: “Immediately the funds, net of the deductions, were credited into MPC’s account at FDH Bank plc, management used the money to make other payments without making any attempt to seek board approval, thereby acting in total disregard to the resolution made earlier by the board.

“As such, the board met to deliberate on the matter and resolved that the acting postmaster general [PMG] and director of finance be suspended with immediate effect pending a forensic audit to be conducted by the National Audit Office.”

MPC has since suspended acting PMG Zacchaeus Meke and director of finance Noel Fole.

Meanwhile, the board has appointed Angel Banda, deputy director for information and communications technology, as acting PMG.

The MPC board had approved the disposal of the building at K1.6 billion to Southern Region Water Board (SRWB) to roll out its turnaround strategy by way of downsizing at the corporation.

But MPC records show that at the time SRWB finally paid the funds,  the parastatal received a net amount of K1.1 billion after SRWB deducted its outstanding K353 million and Malawi Revenue Authority  K100 million.

An MPC insider said the proceeds from the sale ran out within a day of clearance as several institutions, including a bank and utility firms, cashed out their dues.

On the duration of the forensic audit, MPC spokesperson Ida Nkolimbo said yesterday: “We can’t determine as that is beyond our control.”

And in a brief interview yesterday, comptroller of Statutory Corporations Nwazi Mnthambala said she was aware of the MPC board’s decisions.

However, she asked for a questionnaire for further information.

Reacting to the decision, University of Malawi political scientist Blessings Chinsinga, who is also a governance analyst, said if there is evidence that money was not properly used as per guidance, the MPC board has made a proper decision.

“The board doesn’t need to get clearance from anyone to make its decision,” he said in an interview yesterday.

In a separate telephone interview, Catholic Commission for Justice and Peace national coordinator Boniface Chibwana said that for a long time corporate governance at MPC has not been satisfactory, observing that “the present circumstances” may be an opportunity to clean up the mess and review the operationalisation of this parastatal.

He said: “While the suspension of the two is appreciated and applauded, it is imperative to realise that this is not enough in changing the course of the operations of MPC, a body that has been struggling over time and whose purpose of existence is not adequately and genuinely felt by the public anymore.

“The problems at MPC have been neglected by government for a long time, just like is the case in many other parastatal bodies that are not money spinners. Malawians are looking forward to seeing the much touted public sector reforms effectively working at MPC with tangible results.”

On the turnaround strategy, Mkulichi said the implementation of the strategy, which has the blessings of the President, is being done in stages, starting with ensuring that the right people with the right qualifications are maintained.

“MPC has a turnaround strategy aimed at modernisng and digitising its business activities in an attempt to turn it from perpetual loss-making to a profit-making parastal. All these stages require huge outlays,” he said.

To attain a turnaround strategy, MPC said it needed a commitment of about K41 billion to cover the unserviced statutory obligations and creditors while K30 billion would be used for investments.

Treasury figures show that as at December 2020, the MPC posted a loss after tax of K76.9 million.However, projections to end of June 2021 show a profit of K4.1 million.

In a communication to colleagues which The Nation has seen, Meke said he was suspended for failing to ringfence proceeds from the disposal of the Zomba building due to pressing circumstances involving pre-existing liabilities.

MPC has K10.04 billion debt in unserviced statutory obligations and creditors dating back to 16 years.

MPC was established as a statutory corporation in June 2000 under the Communications Act Number 41 of 1998.