The Anti-Corruption Bureau (ACB) has written Secretary to the Treasury Betchani Tchereni, asking him to shed light on the payment of $4,983,400 government paid to International Armoured Group, a company linked to United Kingdom-based businessman Zuneth Sattar.
ACB spokesperson Egrita Ndala confirmed the development in a written response to The Daily Times.
The $4,983,400 is part-payment of the total contract sum of $19,993,600 which the Malawi Government entered into with Sattar’s firm Malachite FZE on May 24 2021 to supply Malawi Defence Force (MDF) with 32 armoured personnel carriers (APCs).
On November 1 2021, ACB issued a Restriction Notice on the contract before Attorney General Thabo Chakaka Nyirenda cancelled the contracts thereafter in January 2022.
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Ndala indicates in her response that ACB has not cleared the payment.
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“It is not correct that the bureau has cleared the payment. In fact, the bureau, on Monday, 5 February 2024, sent a notice to the Secretary to the Treasury to produce necessary documentation surrounding the same payment.
“It should be stated here that government does not consult the bureau when making payments to suppliers,” Ndala said.
Briefing reporters in Lilongwe yesterday, Information Minister and government spokesperson Moses Kunkuyu and Defence Minister Harry Mkandawire said the government has not engaged in any new contract with Sattar-related business entities; neither are there plans to do that.
Kunkuyu said the legal effect of terminating a contract for public convenience is that government, as a procuring entity, is under obligation to pay for goods supplied, goods delivered or goods that were under production at the time of the termination.
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“Government wrote Malachite FZE on 11 January 2022, informing them that the contract for the supply of APCs had been terminated. Malachite FZE was advised that the company would be paid for only the value of equipment supplied, or specifically made, or which are being specifically manufactured under the procurement contract, and not for lost profits.
“In this regard, government, through the Auditor General, instituted an audit and other investigations which established that some goods were already delivered while some had already been produced. In view of this discovery, and in line with Section 46 of the PPDA [Public Procurement and Disposal of Assets] Act, government is under legal obligation to pay for the goods produced and/or delivered.
“The government, therefore, initiated payments to International Armored Group FZE, the manufacturers of the equipment, for the produced APCs. The payment is yet to be externalised by the Reserve Bank of Malawi. However, there has been misinformation and media sensationalism to the effect that the government is ‘still in bed with Sattar’ and making payments to Sattar companies despite termination of the contracts regardless of the above facts,” Kunkuyu said.
Last week, a group of civil society organisations called on government to freeze payment on the contracts until the ACB concludes its investigation on the matter.
During the briefing, Mkandawire said government has no plans to arrest journalist Gregory Gondwe over the matter.
He said had the State been interested in Gondwe, they would have stopped him when he was going out of the country via Kamuzu International Airport in Lilongwe.
He said, on that occasion, the State machinery was informed of Gondwe’s plan to go out of the country but it gave the authorities at the airport permission to clear him because they have no issues with him.
