Further investigations emanating from the Reserve Bank of Malawi (RBM) forensic audit of May 2021 suggest that as much as K600 million was laundered though Malawi’s foreign embassies.
The money would eventually land in the hands of politicians and public officials, who would use it to buy property.
In May this year, there circulated a report of a forensic audit, conducted by Deloitte & Touche Services Limited, about government-related financial transactions at the Central Bank.
The audit focused on the transactions that happened in the period between January 1, 2019 and June 30, 2020.
Among the allegations which the auditors investigated was the claim that RBM officials were using embassies to steal huge sums of money through the financing architecture in the Ministry of Foreign Affairs.
It was alleged that RBM would release funds, which would then be cashed through embassies and then into the personal accounts of senior Democratic Progressive Party (DPP) officials, which they would then use to acquire property outside the country.
Now, Malawi News has it on good authority that further investigations on this matter have established that as much as K679.7 million was laundered in this process.
Various sources, speaking on condition of anonymity, have independently confirmed the finding.
We took the matter to Eisenhower Mkaka, Minister of Foreign Affairs, whose ministry is responsible for embassies.
Mkaka refused to comment much, arguing that the money did not vanish under his watch.
“I wouldn’t comment on the findings. However, what I can say is that this will never happen again and that new staff that have been deployed in various embassies will be responsible for any mismanagement of the funds,” Mkaka said.
We also contacted Reserve Bank spokesperson Ralph Tseka who also refused to comment.
“I cannot comment on the matter because it is in Court,” he said.
Last month, the State asked the Lilongwe Chief Resident Magistrate Court to grant it 45 days to conclude investigations and make disclosures in the case where former RBM governor Dalitso Kabambe and three others are accused of abuse of office, neglect of office and money laundering.
They were arrested in connection with the audit.
At that time, Director of Public Prosecutions Steven Kayuni told the court that further investigations based on the audit would involve a team of about 20 investigators from Fiscal Police, Financial Intelligence Authority and the Anti- Corruption Bureau who would need about 30 days to conclude their investigations.
Kayuni added that, after the investigations, the State would need another 14 days to make disclosures.
“The Covid pandemic has affected progress of the investigations. Some of the witnesses were in isolation, some of them are not available now and they will be meeting the investigators later,” he said.
He added that there was also an aspect of international cooperation that needs to be pursued.
“There is the United Arab Emirates, Mauritius and Egypt that need to be pursued from the RBM Forensic Audit,” he said.
Apart from Kabambe, two other officials that were arrested in connection with the audit are former RBM deputy governor for operations Henry Mathanga, former director of financial markets operations Roderick Whiyo and RBM Senior Finance and Market Operations Dealer Leah Donga.
But the audit report has attracted law suits. Mulli Brothers Limited (MBL) has filed a law suit, demanding a total of K2.1 billion from Deloitte & Touche Services Limited for defamation.
The report, which details how some RBM officials allegedly bent own rules to facilitate payments, claimed that Mulli Brothers Limited (MBL) was among those that benefitted from the financial improprieties at the Central Bank.
On the other hand, FDH Financial Holdings Limited and its subsidiary FDH Bank plc have sued Deloitte, demanding about K5 billion as compensation for alleged breach of contract in relation to the forensic audit at Reserve Bank of Malawi (RBM).
In a claim filed at the High Court of Malawi Commercial Division, FDH Financial Holdings and FDH Bank plc claim that Deloitte was not supposed to commit to the RBM audit because it was the existing external auditor for the two firms.