The Anti-Corruption Bureau (ACB) has told the court that Malawi Defence Force (MDF) took delivery of used and old vehicles presented as brand new in a disputed $30 million (about K52.5 billion) 2012 procurement contract.
State witness and ACB investigator Flattery Nkhata told the High Court of Malawi Commercial Division in Lilongwe on Wednesday that some of the vehicles supplied in the contract were used and up to 30 years old.
Testifying in a case where businessperson Shiraz Ferreira of SF International is claiming $7.1 million from Malawi Government for supplying military hardware to MDF between 2012 and 2017, the witness said records show that the vehicles supplied, including Samil cargo trucks and Pumas, developed faults soon after distribution.
Nkhata said the contract stipulated that the vehicles were supposed to be new, of recent model and recent improvements among others.
“But upon receiving the vehicles and distributing them, there were reports that the vehicles had problems. The supplier had given MDF used and old vehicles without disclosing this at the time of delivery,” he said.
Nkhata further told the court that the bureau relied on Malawi Revenue Authority (MRA) documents which showed that the vehicles were manufactured between 1980 and 1988.
He also said the supplier delivered 50 out of 180 contracted carrier vehicles and six out of 12 military Pumas.
The witness added that payments were made before delivery of goods and that some goods were not delivered in full. He said it emerged that Ferreira, not MDF, initiated the contract.
Said Nkhata: “The supplier is said to have secured special funding from Treasury according to the evidence we have and he went to a government office to load funding into a system. This is unusual. Funding was supposed to have come from the controlling officer and in this case, the MDF Commander.”
Earlier, presiding judge Chifundo Kachale threw out accountant and witness James Lindani for sharing notes with lawyer Shabir Khan during proceedings.
Lindani, who is a witness for SF International and was in the visitors’ gallery, was immediately ordered to leave court and barred from returning to the proceedings.
The court has since given the State five days to file any amended witness statements and the claimant seven days for cross-examination if needed. Both parties have also been given 30 days to file final written submissions.
In 2013, the supplier received advanced payment for the contract and was paid about $10.8 million and that Ferreira only supplied for $8 million after three years.
In June this year, Attorney General Thabo Chakaka Nyirenda told the court that government repaid the K6 billion loan taken by Ferreira, who allegedly failed to pay it back. He said the development meant that Ferreira has no grounds to claim more money from the public purse.
Ferreira’s company, SF International, is suing the Malawi Government demanding $6.9 million (about K12 billion) in compound interest due to delayed payments on the $30 million contract it had with MDF.
