- FIA traces transferred funds,
- Pioneer’s Karim cries foul
The legal battle between the Financial Intelligence Authority (FIA) and businessperson Zameer Karim of Pioneer Investments (PI) over the controversial K145 million donation to the governing Democratic Progressive Party (DPP) is refusing to die.
Barely days after FIA—a State anti-money laundering and suspicious financial transactions watchdog—tracked down and obtained a freeze order for bank accounts where PI transferred the K145 million, Karim through lawyer Frank Mbeta has taken to court the Authority and its director general Atuweni Juwayeyi-Agbermodji for contempt of court.
In another case, Karim—who is under investigation in connection with the K2.7 billion Malawi Police Service (MPS) food rations procurement contract—through another lawyer Nuru Alide is seeking an order to put aside a freeze on three bank accounts as obtained by the Authority.
The High Court of Malawi Commercial Division in Lilongwe has since set September 6 (tomorrow) as the date to hear Karim’s plea for the bank accounts to be unfrozen And effectively facilitate access to the funds.
In his affidavit attached to the contempt of court application, Alide submits that the defendants (FIA) removed K26 606 628.86 from the account of Karim’s associate Yasin Sattar and K12 541 795.32 from Mbeta’s account “without sanction and in contempt of the court’s stay order”.
According to a copy of a letter from First Merchant Bank (FMB) senior relationship officer Martha Moyo dated August 16 2018 which The Nation has seen, the FIA froze the accounts at the bank and in turn the bank transferred the funds into a suspense account.
The developments come against the background of an earlier court order Karim and PI obtained on August 23 giving him access to the bank account.
But The Nation established that before State agencies—FIA and the Anti-Corruption Bureau (ACB)—could be served with the order, the businessperson transferred the funds from the concerned FMB account.
Lilongwe-based judge Ken Manda of the High Court Commercial Division gave Karim the relief on August 23 and the FIA was only served the same on August 27.
FIA spokesperson Masautso Ebere was yet to respond to our questionnaire on the matter as we went to press.
On the other hand, Alide confirmed the affidavit in support of Karim’s application, but said: “I will not comment much because the matter, as you have indicated, is in court. We have submitted the documents and we are waiting for the court hearing.”
In an earlier e-mailed response on August 27, Ebere said the Authority noted transactions in the hitherto frozen bank account and sought an explanation from FMB only to learn that there was a new court order.
Said Ebere: “The FIA has received an order on this matter. As a background, the FIA, acting on it powers in Section 23(4) of the FCA, froze the K145 million that had earlier been paid into the account of Mr. Zameer Karim. We froze the funds on 14th August 2018.
“The stay order was obtained in the High Court’s Commercial Division on 23rd August 2018, but we were only served with the order on 27thAugust 2018. We are in the process of setting aside the order and also analysing the trail of the funds.”
The K145 million has stirred debate since a leaked ACB investigation report revealed that Karim through his PI deposited the said amount in a DPP bank account at Standard Bank whose sole signatory is President Peter Mutharika.
Faced with pressure and an outcry from several quarters, including human rights defenders, DPP later announced it was returning the funds to the donor.
In the ACB investigation report, PI is suspected of inflating the contract price from K2.327 billion to K2.8 billion days after it was signed in August 2015. It also named several suspects, including senior MPS officers. No arrests have been made to date.
The ACB report, dated November 2017, also showed that a day after the supplier deposited K2.793 billion payment from MPS for supplying 500 000 ration packs, the company transferred K145 million from its National Bank of Malawi plc account to the DPP account at Standard Bank on April 13 2016.
The President, according to the report, opened the account in 2015, one year after assuming office. The report added that between January and October 2016, Mutharika “made cheque withdrawals amounting to K65 million from the said Standard Bank account”.
Prior to the MPS payment deposited on April 12 2016, according to the investigation, PI account held at National Bank of Malawi Henderson Street Service Centre in Blantyre had a negative balance of K30 426.66.