It never rains but pours for businessperson Zameer Karim as the High Court of Malawi-Commercial Division has ordered him to pay the Malawi Government about K2.3 billion in connection with the infamous Malawi Police Service food rations contract.
In her judgement dated November 13 2020, Judge Annabel Mtalimanja also awarded the claimant, the Malawi Government through the Office of the Attorney General, costs of the application, meaning that Karim will pay legal costs incurred in the case.
In delivering the judgement, the judge said: “In my considered view, the bank [CDH Investment Bank], having activated clause 5 [of the contract], the defendant [Karim] can no longer invoke performance of clause 2[b] since the claimant is now paying the whole balance of the judgement debt outstanding to the bank.
“There is, therefore, no basis to enter summary judgement in favour of the defendant. Thus, the application would also fail on this basis.”
The court learnt that the said clause five was activated on November 12 2019 through a report to the government and certificate of judgement demanding payment of K2.3 billion being the judgement debt then outstanding, interest and costs.
Reacting to the judgement in an interview yesterday, senior State advocate Pirirani Masanjala, who is also spokesperson for Ministry of Justice and Constitutional Affairs, said the Office of the Attorney General had sued Karim and his Pioneer Investments to claim a refund of the money government paid CDH Investment Bank Limited.
Court records indicate that Malawi Police entered into a contract with Karim’s Pioneer Investments to supply 500 000 food ration packs at about K2.1 billion.
However, Karim, according to court documents, did not have sufficient funds to execute the contract; hence, he approached CDH Investment Bank Limited to provide K700 million. One of the conditions was an agreement of assignment of proceeds under the contract to CDH Investment Bank.
Reads part of an argument the Attorney General submitted in court: “However, some officers under the claimant institution [who are currently being prosecuted by the Anti-Corruption Bureau], improperly, without authority, accepted the notice of assignment of proceeds to CDH Investment Bank Limited.
“When the contract price was being paid to the defendant, it was paid directly to him. Unknown to the claimant, the defendant [Karim] defaulted servicing its loan facility with CDH Investment Bank Limited.”
In 2017, the Attorney General’s office was sued by CDH Investment Bank and the Malawi Government was made to pay about K2.3 billion which included the loan Karim obtained from the bank, interest and some collection fees.
But the payment to CDH Investment Bank followed an agreed judgement and was on top of what government, through Malawi Police, had already paid Karim, according to Masanjala.
He said: “So, ideally, it appeared like double payment because Zameer Karim was already paid and then instead of him paying CDH Investment Bank, the bank sued us [government] to pay them and a judgement was made to that effect.
“We had sued Karim to pay back the money and the court has awarded us our claim.”
Lawyer representing Karim in the case, Nuru Alide, did not respond to our questionnaire sent through WhatsApp. When called, he said he could not talk because he was driving.
The judgement came barely a day after the State charged Karim with intent to defraud Ecobank Malawi K850 million by allegedly fraudulently obtaining a loan purportedly guaranteed by the Malawi Police Service.
Fiscal Police Department arrested the businessperson in Blantyre on Thursday last week before taking him to Lilongwe alongside an employee of the bank, Victoria Chanza, who was arrested on Friday and was granted police bail in Lilongwe on Saturday.
Both Karim and Chanza on Monday pleaded not guilty to three counts of forgery contrary to Section 358 of the Penal Code, uttering a false document contrary to Section 360 of the Penal Code and fraud other than false pretences contrary to Section319 (A) of the Penal Code.