Malawi MPs told hand off MSB deal
The Malawi Law Society (MLS) and Sunduzwayo Madise, an expert in financial services regulation, have said Parliament has no legal basis to challenge the proposed sale of State-owned Malawi Savings Bank (MSB).
The two parties argue that such an action by Parliament would be tantamount to usurping the powers of another arm of government, the Executive.
The Public Private Partnership Commission (PPPC) has opened bids for the sale of MSB where FDH Bank was the only bidder amid a challenge the Budget and Finance Committee of Parliament is leading to stop the sale until they consult stakeholders, including ordinary Malawians.
The parliamentary committee hinted it would seek legal redress if government went ahead with the transaction.
But MLS secretary Khumbo Bonzoe Soko said in an interview on Sunday that much as members of Parliament (MPs) had the competence to demand accountability from the Executive on the sale of MSB, the Executive remained the shareholder of the bank.
Said Soko: “Our [MLS] view is that there is no legal basis for the legislators’ insistence that they approve the MSB sale. And while as people’s representatives, members of the National Assembly are competent to demand accountability from the Executive on this issue, they cannot strictly and legally speaking, usurp the shareholders’ powers to decide on what to do with their shares in the bank.”
However, Soko asked the Executive to live up to its obligations because it holds its stake in the bank on behalf of and for the interest of all Malawians.
Madise, who is also an expert on corporate finance law, said MSB was registered under the Companies Act, but it was not a statutory entity created by a Statutory Act of Parliament for the MPs to have a say on its sale.
He said: “It does not matter who owns MSB. For purposes of corporate law, it is a private company. Now, if we compare it to the old Post Office Savings Bank, that one was created by an Act of Parliament. Therefore, Parliament had a role in whatever happened to it.
“But Parliament has no direct role [to approve or otherwise] the sale of a company registered under the Companies Act.”
Madise said had it been that MSB was created as a statutory corporation, the Minister of Finance could have been held accountable to explain why shares were sold and whether due diligence was conducted before and during the sale.
Emphasised Madise: “But Parliament has no business approving the sale of government shares in a private entity. It boils down to the doctrine of separation of powers.”
Madise, who teaches law at Chancellor College in Zomba but currently pursuing further studies in the United Kingdom, also criticised government for not privatising the bank when it was first created, saying government had no business operating a commercial bank to avoid political meddling as it has happened with MSB.
“Political meddling affected its performance and even when it flouted the Basel Capital Adequacy Requirements, the Governor of the Reserve Bank could not do much really. His hands were tied.
“Now it seems the governor has had his hands loosened to fully act on the bank and demand that it complies with minimum capital adequacy rules,” he said.
Madise also described as an exercise in futility the move by the Budget and Finance Committee to seek views from people on whether the bank should be sold because the Minister of Finance had not flouted any laws.
The Budget and Finance Committee had placed adverts calling for submissions on the sale even after hearing reports that bids had already been opened.
Peter Chakwantha, chairperson of the Legal Affairs Committee, which is also challenging the sale, said much as government had not flouted any law, there was need to review the legislation which empowered the Executive to get rid of a national asset without consulting Malawians.
“We believe there is a need to back to the people and reengage them so that recommendations towards its sale should be inclusive,” he said.
A member of the Budget and Finance Committee, Peter Dimba, who moved a motion in Parliament to halt the sale, has said if government was sincere about raising capital to save the bank then it could do so through an initial public offer (IPO) on the Malawi Stock Exchange (MSE) to enable all Malawians participate in the running of MSB.
“Through this process, one investor is simply robbing Malawians of their asset,” Dimba said.
Besides MSB, government is also offloading its shareholding in Indebank Limited where five bidders were shortlisted.
If Malawians can’t find solution to this crucial issue through a legal process then they should seek redress through a political process. In this case, one option is to consider grounds for impeachment of the existing leadership. Why should we bother with a legal solution when our brothers and sisters in legal sector have failed a million times to protect the interests of the masses through protect of executive thieves!!
Lawyers are the biggest contributors to the chaos in this country! Remember how they held this nation at ransom during the elections last year – when it was all clear that MEC had powers to recount votes without the courts???? Now they say MPs don’t have a mandate to question how the executive uses and (abuses) state resources????? Mxxiiii!
The law that says Parliament has no say in this issue, was made by parliament itself. The act that says a bank must have a certain amount failing which it should not operate, was made by parliament.
The problem with Malawians is that we make laws to control individuals, we make laws for specific situations, and when the situation no longer exists the law becomes redundant.
Don’t blame lawyers. It is not lawyers that are saying MPs have no mandate, it is MPs themselves that said they have no mandate.
But I thought Parliament is enjoined by constitution ‘to promote the interests of Malawians’ and I would opine that this role is not only restricted to law making but also to their oversight functions. The elephant in the room in this matter is not about whether the executive has powers to do this or not but its about the abuses that occurred at this bank, and it is a shame that the MPs have no guts to bring all these issues in the open. That said, I am at pains to see the MLS trying to stop MPs from approaching the courts on this matter. What is the interests of the MLS in this matter? If their case is inadmissible before the courts, then let the judges say so not MLS.
My take on this issue is very simple. MSB is a government company, a company for the people of Malawi who we are inherently shareholders. On this and other interests we have elected leaders to represent us. If we are not satisfied there is a reason for our MPs to challenge such moves
lawyers are the biggest scam this country has ever had. They all have mafia tendencies and have their own interest at heart!!! i would be surprised that these bunch of so called educated mafia’s have been contacted and promised something to speak and convince the rest of the populace on the legality of selling the bank. The issue at heart here is the ground on which this bank is being sold and who is being protected and why certain individuals have interest in this whole process. You have people who were at the hear tof destroying this bank in Government and you wonder why they are doing their best to ensure that this asset is sold off..!!! why now? why not then? Malawians cant live in the dark no more with some misguided mypic advice from individuals who want to make us feel they are smart!!!!