Government has given FDH Bank a 14-day ultimatum to return money amounting to K10.4 billion it received from Reserve Bank of Malawi between December 2018 to December 2020, Malawi Gazette can reveal.
The ultimatum is from February 25, 2022 and money should be returned with interest at the current commercial rate.
A letter from Director of Public Prosecution says government has further hinted that FDH Bank board directors and senior management are likely to face criminal charges for their role in aiding such clandestine financial crimes.
“The money was paid without following procedures as such government has detected money laundering in these transactions. In short FDH Bank received proceeds of crime,” reads the letter.
The DPP highlights that an investigation by state agencies has revealed that there were unwarranted and unjustified payments during the said period for the purpose of the Treasury Note Programme.
The order from government comes as a result of a forensic audit that was carried by Deloitte coupled with supporting investigations from state agencies.
The Financial Crimes Act gives power to government to forfeit property believed to have been acquired via criminal acts.
The bank, owned by the Mpinganjira family, has been mired in controversy since it acquired defunct Malawi Savings Bank.
The deal smelt political interference from day one because of the involvement of politicians from the Democratic Progressive Party (DPP) who had outstanding loans that were later treated as toxic and unredeemable.