World Bank, Govt clash over Mulli

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overnment and the World Bank have clashed over Mulli Brothers Limited (MBL), with the latter accusing the Joyce Banda administration of treating the firm unfairly.

At issue is Minister of Justice and Constitutional Affairs Ralph Kasambara’s directive last September stopping all government ministries, departments and agencies from dealing with MBL Holdings Limited.

Kasambara—then doubling as Attorney General—claimed in his September 5 2012 directive that giving government business to MBL would jeopardise investigations into alleged corruption, money laundering and tax evasion charges against the company and its chairperson Leston Mulli.

The letter also levels the same charges against Democratic Progressive Party (DPP) regional governor (South) and businessperson Elvis Masangwi and his Elvis Freight and Clearing Agents.

Kasambara’s letter was copied to the Office of the Director of Public Procurement (ODPP) with specific attention to director Dye Mawindo and the Office of the Vice-President for the attention of incumbent Khumbo Kachali.

But the World Bank has warned government that unless it has proof against Mulli, it is unacceptable to deny MBL business opportunities from World Bank-funded projects, including the Irrigation, Rural Livelihoods and Agricultural Development Project (Irlad) where MBL is being blocked from supplying fertiliser despite winning tenders.

Kasambara’s directive and the subsequent spat between government and the World Bank come against the background of Irlad’s delays to award fertiliser supply contracts to successful bidders following a January 2013 tender.

According to bid evaluation results of the January tender, Mulli Brothers was the preferred bidder in Lot 1 of the five-Lot tender for the supply of NPK fertiliser for a winter cropping programme that Irlad implements.

Sources said this week that when bid results were communicated to the Ministry of Agriculture and Food Security, officials there advised Irlad to write the World Bank that Mulli has been disqualified because of the allegations cited in the Kasambara order.

The Nation did not manage to see Irlad’s communication to the bank, but we have seen the bank’s response to the project secretariat in which Pieter Waalewijn, the project’s Task Team Leader (TTL), says:

“The reasons provided [for denying Mulli] are not acceptable. We acknowledge receipt of your e-mail dated June 7 2013 on request for IDA [International Development Association] ‘No Objection’ to award contracts for NPK fertiliser for winter cropping.

“IDA has reviewed your request and notes that Mulli Brothers has been disqualified for award of contract under Lot 1 due to an allegation that the bidder is involved in money laundering, fraud and corruption.

“The reasons provided are not acceptable as any bidder is innocent until proven in a court of law of being guilty of an offence. Following the procurement guidelines and the information provided in the BER [Bid Evaluation Report], Mulli Brothers should be awarded the contract for supply of fertiliser under Lot 1 and, therefore, the [BER] should be revised accordingly.”

Further warns the TTL: “Regarding Lot 1, please resubmit a revised Bid Evaluation Report offering the contract to the lowest evaluated bidder for our review soonest. Further delay will compromise the relevance of the procurement.

“Please ensure that the contracts are awarded within the bid validity period, signed and acceptable and valid performance securities are obtained within the stipulated period in the bidding document.”

When asked to comment on the matter on Tuesday this week, the World Bank did not want to delve into any details on the procurement and the resultant policy clashes.

The bank said: “The responsibility for the implementation of the project, and therefore, for the award and administration of contracts under the project, rests with the Government of Malawi.”

Results for Lot 1 show that Mulli was the lowest evaluated bidder in the NPK category.

The top five in the Lot are Mulli, followed by Export Trading, Optichem, International Procurement Services and Pamela Investments.

In Lot 2, Mulli came third after Optichem and Export Trading, in Lot 3 Mulli also followed the same two companies; in Lot 4, Mulli was fourth with Nyiombo Investments on position one followed by Optichem and Export Trading.

In Lot 5, Mulli Brothers Limited came second after Optichem (2000) Limited.

In urea bid, Mulli was fourth, third, fifth, sixth and second in Lots 1, 2, 3, 4 and 5.

But, according to government, the conglomerate should not get any of these fertiliser supply contracts in spite of its capacity to deliver.

This position is based on the Kasambara letter of September 5 2012 titled: “Re: (1) Mulli Brothers Ltd aka Leston Mulli (2) Elvis Freight and Clearing Agents aka Elvis Masangwi.”

The letter was addressed to Principal Secretary for the Ministry of Agriculture and Food Security Dr Jeffrey Luhanga.

Kasambara’s letter reads in part: “I write to confirm that the Malawi Government has directed that no government department or organisation should conduct any business with the foregoing persons, their companies or businesses until the ongoing criminal and tax investigations have been finalised.

“So far, overwhelming evidence has been unearthed supporting charges of corruption, money laundering and tax evasion. Any government business extended to them now might easily compromise money laundering investigations and tax implications.

“The Malawi Revenue Authority [MRA], Financial Intelligence Unit [FIU] and the Malawi Police Service [MPS] are all involved in these investigations; and are likely to furnish this office with their final reports within the next 21 days. Thereafter, I shall write to you on the government’s final position on the matter.”

Investigators in the dark

But nine months after Kasambara’s directive, some of the agencies supposed to have been helping the Justice Ministry with investigations say they are not aware of any cases against Mulli and Masangwi.

FIU spokesperson Masautso Ebere said on Monday: “The FIU has no knowledge of the cases which you have indicated in your questionnaire; as such we cannot give any comment.”

MPS was also blank when contacted, with deputy National Police spokesperson Kelvin Maigwa saying, “We don’t have any report on that.”

Ministry of Justice spokesperson Apoche Itimu said the reasons for banning Mulli bordered on a sour track record, yet Kasambara’s letter clearly levels criminal charges against Mulli and Masangwi.

In an e-mail response, Ministry of Agriculture (MoA) spokesperson Sarah Tione said the ministry would not comment on the matter. She advised The Nation to talk to Ministry of Justice.

Asked if Mulli has been given any tender from the ministry since September 5 2012, Tione said: “That is subject to procurement procedures and assessment.”

Irlad project manager Dicksie Kampani, when asked about the sidelining of Mulli, skirted around commenting on the matter specifically.

Contracts missed

Asked if he is aware of the directive isolating his company from government business, Mulli said: “We have heard about it and we think that is why we are not getting any business even where our rates have been competitive.”

Apart from the Irlad tender, which is yet to be awarded, our investigations have revealed that Mulli has lost a number of bids with government since late last year.

Recently, the National Food Reserve Agency (NFRA) tendered for maize supplies to its depots in Mzuzu, Luchenza, Limbe, Mangochi and Kanengo.

Mulli joined the bids through seven of his companies-– Thuchira Estate, Zao Marketing, Steco, Sapitwa Construction, Chikale Estate, Namphasa Farm and Mulli Brothers.

All these have not made it to the final list of 22 suppliers listed as successful bidders.

MBL started business in the Kamuzu Banda era, but became a household name during the Bingu wa Mutharika regime which ended in April 2012 following Mutharika’s demise and to which Mulli was particularly close.

The Anti-Corruption Bureau (ACB) said this week it is not aware of the said investigation into Mulli’s case. The bureau, according to its senior public relations officer Egrita Ndala, said it was not the addressee to the said letter.