Police probe K2.6bn fraud at Nchalo Greenbelt

Fiscal Police have instituted investigations into a K2.6 billion alleged fraud involving a 2018 farming contract between Agricultural Development and Marketing Corporation (Admarc) and Nchalo Greenbelt Limited to produce cotton seed.

The move by the law enforcers follows a recommendation by the Office of Director of Public Prosecutions (DPP) for criminal proceedings against people linked to the alleged scandal as well as asset recovery and restitution.

National police spokesperson Peter Kalaya confirmed in an interview on Thursday that the probe is underway, but refused to reveal identifies of those who have been questioned so far.

He said: “I can confirm that our Fiscal Police are already following up on this matter following a letter of recommendation that came from the office of the DPP.”

In 2018, Nchalo Greenbelt Limited entered into an agreement with Admarc to produce 4 700 metric tonnes of cotton seed, but this was done without the approval of the board.

The agreement was for Nchalo Greenbelt Limited to provide land and the workers while Admarc would provide financing to acquire agricultural inputs

The DPP’s letter, which we have seen, dated December 2 2022 Ref. No. DPP/admn/Greenbelt/2022/1, addressed to Inspector General (IG) of Police Merlyn Yolamu, and copied to director of Criminal Investigation Department and head of Fiscal Police, states that having looked at the law, the DPP considered that there is need for the police to follow up on issues of public trust, corporate fraud and negligence.

Reads the letter: “Madam IG, herein lie issues that need attention: public money pilferage, fraud other than false pretences, utter theft, abuse of office, negligence by public officials, money laundering, offences under the Public Finance Management Act and criminal negligence.”

According to the letter signed by DPP Steven Kayuni, currently suspended over the arrest of Anti-Corruption Bureau director general Martha Chizuma, the contract between Admarc Limited and Nchalo Green Belt Limited was marred by fraudulent activities and a forensic audit that was done by National Audit Office (NAO) confirmed the rot.

The audit found that there was fraudulent procurements of plant, property and equipment as well as abuse of cashed cheques, loan fraud, fraudulent procurement of fuel, irregular procurements of vehicle and machine spare parts and abuse of office.

It also exposed fraudulent allowances for chiefs, procurement of fertilisers and chemicals, payment of seed, procurement of protective clothing and payments for labour costs.

The DPP also says that other possible charges for public servants and private individuals that were engaged in the agreement include fraud other than false pretenses, criminal negligence by public officials, money laundering, theft and conspiracy to defraud.

According to the NAO report, Admarc in 2020 obtained a K2.5 billion loan from Export Development Fund to finance the project but Nchalo Greenbelt Limited delivered K92 million worth of cotton seed only.

The report also found that at least 43 companies that received K1.5 billion from Nchalo Greenbelt Limited did not provide any service or delivered goods.

In an earlier interview, Greenbelt Authority board chairperson Wester Kosamu hinted that the matter is also being investigated by the ACB.