In a new twist to the controversial K145 million donation to governing Democratic Progressive Party (DPP), the High Court last week put aside a freeze order, effectively granting businessperson Zameer Karim of Pioneer Investment access to his bank account.
Before State agencies—the Anti-Corruption Bureau (ACB) and the Financial Intelligence Authority (FIA)—could be notified about the new order, the businessperson cashed the K145 million and transferred all funds from the bank account in question held at First Merchant Bank (FMB), The Nation has established.
Lilongwe-based judge Ken Manda of the High Court of Malawi Commercial Division on August 23 2018 gave Karim the relief through his lawyer Frank Mbeta pending a judicial review, according to the order The Nation has seen.
Reads the order in part: “And it is ordered that the 1st defendant’s [FIA] administrative instruction on the 2nd defendant [FMB] to deny the applicant [Karim] access to his K145 000 000.00 be and is hereby stayed pending the hearing and determination of the judicial review proceedings or until further order.”
Karim’s action followed an order the FIA—the State anti-money laundering and suspicious financial transactions watchdog—obtained alongside the ACB last week as they probed Karim and Pioneer Investments involvement in the controversial K2.7 billion Malawi Police Service (MPS) food rations procurement contract.
In an e-mailed response yesterday, FIA spokesperson Masauko Ebere said the authority noted the transactions in the hitherto frozen bank account and sought an explanation from the bank only to learn that there was a new court order.
He said the FIA was served with the order yesterday, August 27 2018.
Said Ebere: “The FIA has received an order on this matter. As a background, the FIA, acting on it powers in Section 23(4) of the FCA, froze the K145 million that had earlier been paid into the account of Mr. Zameer Karim. We froze the funds on 14th August 2018.
“The stay order was obtained in the High Court’s Commercial Court Division on 23rd August 2018, but we were only served with the order on 27thAugust 2018. We are in the process of setting aside the order and also analysing the trail of the funds.”
ACB director general Reyneck Matemba was not immediately available for comment while the graft-busting body’s spokesperson Egrita Ndala yesterday said she was yet to be briefed on the matter.
The K145 million has stirred debate since a leaked ACB investigation report revealed that Karim, through his Pioneer Investments, deposited the said amount in a DPP bank account at Standard Bank whose sole signatory is President Peter Mutharika.
Faced with pressure and outcry from several quarters, including human rights defenders, DPP later announced it was returning the funds to the donor.
In the ACB investigation report, Pioneer Investment is suspected of inflating the contract price from K2.327 billion to K2.8 billion days after it was signed in August 2015. It also named several suspects, including senior MPS officers. No arrests have been made to date.
The ACB report, dated November 2017, also showed that a day after the supplier deposited K2.793 billion payment from MPS for supplying 500 000 ration packs, the company transferred K145 million from its National Bank of Malawi account to the DPP account at Standard Bank on April 13 2016.
The President, according to the report, opened the account in 2015, one year after assuming office. The report added that between January and October 2016, Mutharika “made cheque withdrawals amounting to K65 million from the said Standard Bank account”.
Prior to the MPS payment deposited on April 12 2016, according to the investigation, Pioneer Investments account held at National Bank of Malawi Henderson Street Service Centre in Blantyre had a negative balance of K30 426.66.