Mutharikas bought 5 city houses at k20m

Former president the late Bingu wa Mutharika bought a Lilongwe City Council (LCC) house which councillors had marked “not for sale” in 2003 because it was reserved for the chief executive officer of the city, Weekend Nation can reveal.

The former president, through his Bineth Trust, got the house in Area 12 at K5.3 million (US$14, 324) through a sale that disregarded rules set by Ministry of Local Government.

Bineth also got three other LCC houses in Area 3 at K4.8 million (US$12 972), K3.3 million (US$8 918)and K3.7 million (US$1 000) respectively.Bingu’s brother and current Democratic Progressive Party (DPP) president, Peter Mutharika, bought another of city council’s houses in Area 10 at K3 760 000 (US$10, 162).

But according to an investigative audit of 2013 carried out by the National Audit Office (NAO), nine of the 40 houses were sold against these set rules.

 Local Government Act says councils are free to sell their houses as they deem fit.

Using the provision the councillors in the then LCC’s financial committee met on Tuesday 9 December 2003 to discuss among other things, “a proposal to dispose of excess assembly houses.”

“Realising that the assembly does not have the financial resources and/or the management capacity demanded for managing a housing estate which would take away its main objective of providing basic services to its residents, the committee approved that with exception of two houses – 12/174 and 12/177 – one earmarked as the Mayor’s house and the other for the Chief Executive, the rest of the houses should be sold…,” say minutes of the committee meeting which we have seen.

The approved action to sell the 40 houses under Lilongwe City Council did not take place that year until in 2006.

At first, when the council started the process in 2006, Parliament stopped the sale only later to empower the line ministry to set conditions for the sale which were set in a meeting chaired by former minister of Local Government George Chaponda on January 10 2008.

That meeting set out 11 conditions key among them was that the houses should be sold to LCC employees and if a sitting tenant is not a council employee, such offers should be withdrawn.

Condition 2.0 reads: “All houses should be offered to sitting-tenants if they are city assembly employees or employee serving as public servants.”

Condition 3.0 offered more clarification: “In line with the Cabinet directive, all offers made to sitting tenants who do not fall in the above category (2.0) should be withdrawn and the houses should be offered to employees of the council or public servants.”

The meeting also agreed that employees with a minimum of five years service at the council should be offered a 10 percent discount and that the council was to facilitate bank loan facilities to cater for those who may not have cash.

But the NAO audit insists that the sales contravened rules and must be withdrawn.

“It was observed that nine dwelling houses including the Mayor’s Residence were sold to non-sitting tenants at a value of six of them totaling K26 160.000 (US$70).

“This is according to the list of houses produced by management indicating the status of the tenancy of the council’s institutional houses as at 25th June 2006,” reads the February 2013 audit.

The six houses were those sold to Bineth Trust, Peter Mutharika and former chief executive officer of the council the late Donton Mkandawire.

According to the audit, management failed to produce any “independent valuation report purporting that there was no independent valuation of the properties”.

“The sale was illegal and basis of the sale value was unknown,” concluded the auditors recommending that “since government conditions on the sale of institutional houses were contravened, management should withdraw the sale.

Faced with the challenge, LCC chief Executive Officer Richard Hara has called on the parent ministry for direction.

“LCC responded to audit queries on the sale of the houses and submitted the same to the Ministry of Local Government and Rural Development for professional advice and Lilongwe is still waiting for the ministry to provide a way forward based of the recommendations by the audit,” said publicist Tamara Chafunya.

Personal assistant to Peter Mutharika,  Ben Phiri, argued in an interview this week that his master remains the rightful owner of house number 457 on Ulendo Road in Area 10.

“In April 2008, the assembly wrote him a letter informing him that he had been offered the house at the price as per letter in the attachment and that it was on ‘the as it is basis,’ he said.

He added:  “They must find a legal way of getting it as it was purchased in a legal way as well. Otherwise, political utterances, political powers or cheap politics from those that claim to know of the alleged influence has no basis unless proven so and a legal way be put in place then we will surrender, minus that zero,” he challenged.

But audit argues that the sale was illegal because Peter was neither a sitting tenant nor a LCC employee.

Although city management did not show auditors any independent valuation report, Phiri produced one for his boss’ house done by Property Management Development Evaluation.

The report shows that the three-bedroomed house was “in a bad repair state and has been extensively vandalised”.

In 2011, ACB was also investigating Peter, together with some government officials, for buying Malawi Housing Corporation houses which were deemed below market value and sold at a time the body had suspended the sale of its houses.