Salima Sugar accounts frozen over K623m debt

Public private partnership (PPP) venture Salima Sugar Company Limited continues to sail in troubled waters as the High Court of Malawi Commercial Division has frozen its bank accounts over a K623.3 million debt.

The sugar company owes Audit Consult, a Blantyre-based audit firm commissioned by government to conduct a forensic audit to establish the shareholding investments of the company.

According to a freezing injunction order seen by The Nation, the court has ordered that until further notice, the funds standing or coming to the company’s credit with eight of the country’s commercial banks up to K623.3 million be frozen.

The eight banks are National Bank of Malawi plc, Standard Bank of Malawi plc, Centenary Bank Limited, FDH Bank plc, NBS Bank plc, CDH Investment Bank Limited, Ecobank Malawi Limited and First Capital Bank.

The order further restrains the company, its officers or agents from removing or in any way disposing of, dealing with or diminishing the funds standing or coming to the company’s credit with the commercial banks to the extent of K623.3 million.

Reads the order in part: “Until further order of the court, the parties cited shall not transact any disposal, transfer, dissipation or however termed of the funds held for defendant up to the tune of the K623 300 000.”

In the commercial case number 199 of 231, Audit Consult is the first claimant while Audit Consult Advisory Services Limited is the second claimant with the eight commercial banks being parties cited.

In an interview, lawyer representing the claimant Lusungu Gondwe confirmed filing a suit for recovery of the “legal fees that are truly and justly owed by Salima Sugar to our client”.

“What this order means is that, with immediate effect, Salima Sugar cannot transact on the bank accounts until our client is paid. In other words, the court has ordered all Salima Sugar bank accounts to be blocked or frozen,” he said.

The freezing of bank accounts comes a month after the company came under strict State scrutiny after an interim audit report from Audit Consult revealed payments amounting to K50 billion could not be validated.

This forced Secretary to President and Cabinet (SPC) Colleen Zamba to order deployment of State security at the company’s factory in Salima District until the final audit report is issued.