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Thursday, June 13, 2024

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    Two former finance ministers under the Democratic Progressive Party rule, Goodall Gondwe and Joseph Mwanamvekha together with incarcerated business mogul, Thom Mpinganjira will face prosecution over money that was raised after the controversial sale of Malawi Savings Bank to FDH Financial Holdings.

    A continuing investigation has already established that proceeds from the sale never hit Government Account Number 1 and the money cannot be traced.

    “It will not be long before the three find themselves in the cooler. What is being uncovered points to a regime that deliberately passed on a state asset to its cronies to increase political capital. Now it seems the new government is going flat out to trace that money,” an impeccable source in government told this publication.

    The trio have a solid connection to the sale. Mpinganjira was buying a bank whose chief executive was Joseph Mwanamveka while Gondwe served as finance minister.

    Transacting the people’s bank for peanuts: Mpinganjira and Goodall putting pen to paper in 2015

    It is now evident that the three used underhand tactics to push through the sale using questionable means in terms of costing and giving their cronies relief from loan payment.

    Malawi Savings Bank, which was owned by Malawi Government, was sold in 2015 for K9.6 billion (US$21.1m)

    The deal faced huge criticism for several reasons. Firstly, Malawians questioned government’s decision to let go a bank with the widest physical coverage in Malawi at such a cheap price. Other economic and valuation experts estimated that a bank with such assets would not go at anything less than K60 billion.

    MSB: Before it changed hands

    Another bone of contention was on K6.1 billion worth of loans that MSB gave to politically connected persons mainly senior Democratic Progressive Party members. At the purchase of the bank, these loans were rendered as toxic thereby giving relief to the debtors of not paying back.

    Among the large borrowers was Mulli Holdings Limited who owed MSB over K5 billion.

    Just some months ago government also promised Malawians that it will recover all the toxic loans from those who owed MSB when it went on sale.

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