MSB disposal faces probe
To others it may have been a closed case, but Attorney General (AG) Thabo Chakaka Nyirenda has hinted at a probe into the 2015 sale of former wholly government-owned Malawi Savings Bank (MSB).
In the company of Minister of Information Gospel Kazako during the maiden ‘Government Faces the Press’ initiative set to be a weekly event to update to the public on national issues, the AG also said his office will investigate how some politically-exposed persons obtained the loans they defaulted from MSB.
Nyirenda said: “This is disposal of public assets which has to follow the Public Procurement and Disposal of Assets law [2017]. You need to advertise and people bid and once disposed of, money has to be deposited into account number one. But did Account Number One get that money?
“There are also some loans that government inherited that were given under MSB. Did we recover that money? And those politically-exposed people who were getting those loans, was there some interference?
“We want these questions answered and if we find some criminal elements, people involved will be prosecuted accordingly.”
He said there are a number of investigations that government will embark on, including claiming back money from dubious transactions such as where government paid for services that were never delivered.
Nyirenda said it is worrisome to note that there are several claims amounting to K2 trillion and most of them resulting from negligence on the management of public contracts.
“We will be engaging public lawyers on contingency basis to claim on our behalf, no win, no fees, but if they win, they will get an agreed percentage of the claim, for example, 20 percent. That way, we will move with speed” he said.
Reacting to the issues, Public Accounts Committee of Parliament chairperson Shadric Namalomba welcomed the AG’s investigation on MSB, saying it is a move in the right direction which will help to safeguard national assets from abuse.
He said that it will also help to go further and probe similar transactions in the past, including the disposal of the presidential jet and other companies such as Malawi Lake Services and Malawi Development Corporation.
Namalomba said: “We commend the AG for taking this interest and I hope the report of their investigation will be shared with the committee and we are more than ready to complement their effort.
“But beyond this one issue we may wish to go further and do more investigations about other national assets disposed of previously in a suspicious manner.”
Government sold 75 percent of its stake in MSB for K9.5 billion ($21.1 million) to FDH Holdings Limited, owners of FDH Bank plc.
During the signing ceremony of the sale agreement between government and FDH Financial Holdings, former minister of Finance Goodall Gondwe said: “This is a momentous day for Malawi. This will leave the government outside the banking business and commercial activity in the country.”
But the signing ceremony did not go down well with President Lazarus Chakwera who was leader of opposition in Parliament at the time. He said government’s move to disregard Parliament’s decision was an indication to Malawians that the Executive had no respect for other arms of government.
In selling MSB, government also went against recommendations of the Budget and Finance Committee of Parliament whose resolution, adopted by the House, was that government should recapitalise the bank to enable it meet regulatory requirements
