Malawians duped k5bn?

Stranded! About 1 000 Malawians, including university students and businesspersons who invested their money with a financial institution, Greenlights Business Investors Portfolio for high returns are failing to recover their money, Weekend Nation can reveal.

Meanwhile, the Reserve Bank of Malawi (RBM) has said it is aware about the predicament of the ‘investors’, but there is little it can do because Greenlights Business Investors Portfolio is not registered with them.

The bitter and frustrated clients have gone to court to seek justice and an injunction to freeze the company’s bank accounts has been granted as the clients try to recover their money, which is in excess of K5 billion, after investing about K3 billion.

The company, which was founded in 2019, was urging Malawians to invest their money in six categories and get it back, with interest, after six months. The company engaged prominent people who were training its prospective clients on the importance of investments.

The aggrieved clients include students from public universities where the organisation took its investment campaign. Others are businesspeople, who have since closed their businesses after investing all their money with the organisation.

According to one of the clients’ representatives Patrick Singoyi, people who invested their money from 2019 to early 2020 were able to cash out, but those that invested from 2021 to date have not been able to cash out after the agreed period.

While admitting hearing about the issue, RBM spokesperson Davie Ndege said Greenlights Business Investors Portfolio is not a regulated entity, and cautions the public against investing with it.

“Those that want to invest their money are advised to only deal with licensed financial institutions,” he said.

When contacted on the matter, Greenlights Business Investors Portfolio public relations officer Wilson Gondwe referred Weekend Nation to the organisation’s director Kondwani Phiri, who has not responded to our calls since October.

It remains to be known in what portfolios the organisation was investing its clients’ money.

A document we have seen, dated March 8 2022, shows that although the organisation is not registered with RBM, the central bank, in the interest of the affected ‘investors’, still went to court to obtain an order to freeze the organisation’s accounts, and warrants of investigation.

On March 24, the order was removed and the accounts were unfrozen following an application by the organisation’s lawyers. After that, the financial institution communicated to its clients on the same day, updating them on the development.

The company issued another memo on July 1 2022 informing the clients that payment of their dues would resume on July 7 2022, but a day before the start of the exercise, the company informed them that starting from two to three weeks from July 7, they would only refund those who deposited funds with them when they stopped receiving new investments.

According to Singoyi, no client was refunded as cheques that were issued to some clients were referred to drawer.

“The company failed to pay us our money. We have over 963 clients with a total investment of K2.5 billion which, with interest, would amount to K4.3 billion,” he said.

Singoyi said following the development, some clients decided to go to court where they obtained an order to freeze the company’s accounts.

“We have tried to call them but to no avail. When we visited their offices, we found them closed. We are stuck, hence our decision to go to court,” he said.

The High Court of Malawi commercial division sitting in Lilongwe in the first week of October this year extended the freeze order of the organisation’s accounts “until a further order of the court or final determination of the matter”.

One of the organisation’s Lilongwe-based clients, who did not want to be named, said he invested his gratuity and money from other sources amounting to K11 million last year, hoping to yield K27 million.

“I am surviving on begging as if I did not get anything from my contract employment where I received my gratuity,” he said.

Another Lilongwe-based client, a businesswoman, said she invested K1.7 million in January this year meant to pay university fees for her two children in January 2023.

“Schools will be opening soon and I have nothing,” she said.

Another woman who did not want to be named for fear of jeopardise her marriage said she, without he husband’s knowledge, invested K6 million in November last year.

“I closed my business and invested every tambala I had into this company. I was hoping to cash out in May this year.

“I visited their offices where I cried in front of their workers, they gave me a K2.5 million cheque, which was referred to drawer. I am told I fainted and was taken to hospital, where I was told that my heart had swollen. Until today I have a heart problem, the katapira guys are on my neck,” she said.

Parliamentary Committee on Trade, Industry and Tourism chairperson Simplex Chithyola Banda said his committee has not received a complaint from Malawians who have been duped by this organisation. He has, however, advised them to formally present their complaint to his committee so that it can follow up the matter to its logical conclusion.

In his response to a questionnaire on whether the Financial Intelligence Authority (FIA) knew about this matter, the authority’s compliance and public relations manager Masautso Ebere said FIA came to know Greenlights Business Investors Portfolio through reports filed to them by one of the reporting institutions “and this was after the people behind the business were arrested for operating a financial institution without a licence from the regulatory authority, Reserve Bank of Malawi”.

He said the information they received indicates that at least five people were arrested, including the director of the firm.

“Some people who were defrauded by this institution reported to the Governor of the Reserve Bank of Malawi as the Registrar of Financial Institutions.

“Consequently, the Reserve Bank reported the case to the Fiscal and Fraud Unit who investigated the matter and arrested the suspects. Currently, the matter is under prosecution by the Malawi Police Service,” said Ebere.

He, however, said Greenlights Business Investors Portfolio is registered as trading in agro-business.

“FIA is conducting its own enquiries to establish what happened since its declared line of business appears to be different from what was happening on the ground,” he said while indicating that FIA has not received any complaint from any person on this issue.