Mera, Admarc tussle over K2.9bn maize loan
Mera and Admarc are rocked in a tussle over the K2.9 billion controversial loan the former gave to the latter in 2016 to buy maize, a development that has prompted the Attorney General to propose arbitration, Weekend Nation has learnt.
Although Mera loaned Admarc K2.9 billion to purchase 10 000 metric tonnes (MT) of maize, the latter only wants to pay back K900 million, arguing that it sold the maize at a loss of K1.8 billion and that Mera should also pay it K200 million as handling fees.
But Mera could have none of it and threatened to sue Admarc, a development that prompted Mera to seek advice from Attorney General Kalekeni Kaphale who, during a meeting with Admarc, proposed arbitration.
At stake is K2.9 billion which the Mera Board in 2016 decided to withdraw from the Price Stabilisation Fund (PSF) and bail out Admarc by purchasing maize and give it to the the grain marketing company, a decision Finance Minister Goodall Gondwe described as illegal and that his ministry did not authorise the transaction. PSF is meant to cushion Malawians against rising fuel prices.
Mera chief executive officer (CEO) Collins Magalasi told Weekend Nation that after Admarc paid back K250 million, it changed tune and started making new demands.
According to Magalasi, Admarc wants Mera to write off K1.8 billion, the amount it (Admarc) claims it lost after selling the maize and that the grain marketing company also wants to deduct K200 million from the loan as handling fees.
Should Admarc’s wishes be granted, it means the firm will only have to pay Mera K900 million out of the K2.9 billion.
“They started paying back the money but they have now changed the goal posts and are bringing in new issues and raising others that were already resolved. But we are simply demanding the balance,” he said.
In an e-mail response, Admarc spokesperson Agnes Ndovi observed that her organisaton is only disputing the amount and not necessarily the fact that Admarc owes Mera some money.
“It is the figure that is being disputed and that is why Admarc started paying back the money to Mera. The matter was referred to government, which requested the Attorney General to arbitrate on the matter, and we are working towards closing the issue,” said Ndovi.
Kaphale told Weekend Nation that he proposed arbitration after it emerged that the two government companies could not agree
PHOTOGRAPH: NATION
on the amount to be repaid.
He said the Chief Secretary to Government is aware of this development.
But, according to Kaphale, since he made the proposal three months ago, he has not heard anything from both organisations.
It is not known how Admarc incurred the loss of K1.8 billion when in that year the corporation was selling maize at an average price of K250 per kilogramme, which should have earned them K2.5 billion from the sale of 10 000 MT of maize it bought with the PSF resources.
In 2015, Admarc also secured loans of K1.9 billion from FDH Bank and K100 million from Auction Holdings Commodity Exchange (AHCX). In total Admarc bought 22 500 MT of maize from AHCX in March 2016.
The illegal withdrawal from the PSF led to the firing of the then Mera chief executive officer Raphael Kamoto and director of finance Elias Hausi as the Mera board claimed the two did not comply with the law. n
