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Admarc board’s spending spree

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Rhino Chiphiko

While Admarc Board used to go to town accusing staff of stripping the parastatal to the bone, details have emerged how the board members joined the party in skinning the almost dead corporation in the 27 months they were in charge

Amid uncertainty as to what the future holds for the cash-strapped Agricultural Development and Marketing Corporation (Admarc), it has emerged that the immediate past Board of Directors for the company has, in the two years that it has been in office, spent slightly above K900 million on meetings.

The figure is aggregated from the 65 meetings which the board held between October, 2020 and September 22, 2022 when its tenure of office expired.

This, however, does not include expenses from disciplinary hearing meetings and other impromptu gatherings.

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Admarc Charter and Memorandum and Articles of Association stipulate that the board can only have four regular meetings in a year with a provision of two extra-ordinary ones.

This means that in the two years of office, the Admarc board had a legitimate maximum of 12 meetings.

“Board meetings shall be held at least four (4) times a year, at venues, dates and times as prescribed in the notice…The Board may also meet for an extra-ordinary meeting to transact urgent business,” section 15 of the Charter reads in part.

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But the board was in breach of this provision.

In the year 2021, for instance, the Alexander Kusamba Dzonzi -led board met 42 times. Between January 2022 and September, 2022, the Admarc Board Directors met 13 times.

Last week, suspended Admarc General Manager Rhino Chiphiko, claimed that the board used to make frequent requests for meetings which he was turning down, a thing he said contributed to the bad blood between his management and the board.

However, Dzonzi, in separate interviews this week, denied any wrong-doing, insisting that the board never spent beyond the annual budgetary allocations.

“In fact, except for four meetings, the others were called for by management as Extra Ordinary. Ask management and call for reports too. But even with such extraordinary meetings, still our board never spent more than what it was allocated,” he said.

A schedule of meetings and payment vouchers which we have seen indicate that the loss-making entity spent a total K210 million on 15 meetings held in Blantyre.

Another K136.5 million was spent on 21 meetings held in Lilongwe, while K348 million was spent on 29 other meetings also held in Blantyre.

The money, we have gathered, was drawn for sitting, fuel and accommodation allowances; additional to transport and wear and tear for vehicles.

Sources said between March 2022 and September 2022, they met not less than 10 times, and most of these meetings were outside Lilongwe. They also met on their last day in office, according to our contacts.

Dzonzi insisted that most of the meetings they had were meant at revamping and strategising on how to redeem Admarc from its numerous financial challenges.

He said some of them emanated from the huge debts that the company has.

But a schedule of meetings we have seen suggests otherwise. The documents indicate that during most of the meetings, the directors failed to exhaust items on the agenda, thereby necessitating follow-up meetings.

The 112th board meeting, for example, which was an orientation for the board of directors who had just assumed office on September 22, 2020 took place on October 27, 2020. It was continued on November 9 and 10, 2020 respectively.

Such was also the case for the 113th board meeting, which took over a span of four days between April 27 and April 30, 2021.

It is this meeting which, according to a May 2022 internal audit, approved the purchase of the controversial K107 million Nissan Patrol vehicle which led to Chiphiko’s suspension.

The audit further faulted the board for failing to sign the minutes of the said meeting and several others, a trend the audit says signifies failure of systems and corporate governance.

“…The minutes were noted to have not been signed… Due to the limited time we had, we did not ask the Board Chairperson on his position concerning the unsigned minutes. Request for the 112th, 113th Board meeting minutes yielded nothing as they were not available in the minutes file.

“…Confirmation of minutes from the 113th meeting was for no apparent reason deleted from the agenda for the 114th meeting,” the audit report reads in part.

Asked why they never signed their minutes as a standard practice, Dzonzi said: “The company secretary of Admarc Board is GM. Ask him as to what stopped him from bringing the minutes to be signed by the board. The board was not there to do management’s duties.”

But Chiphiko yesterday denied responsibility, saying it was delegated to the company secretary.

“It is true that the GM is the Secretary to the Board but in practice, this duty is delegated to the Company Secretary. So, it is the Chairperson and Company Secretary who sign the minutes and, in this case, there were two officials who were supposed to sign the minutes because they were responsible to take minutes during board proceedings,” he said.

Asked on why government let the Admarc Board violate some of the laws regulating their operations, Attorney General Thabo Chakaka Nyirenda said it was up to the shareholders to hold the board accountable, in terms of company law applicable in Malawi.

Secretary to the Treasury holds 99 percent of shares in Admarc on behalf of government.

Admarc has in the last 20 years been unable to make dividends, arguably due to a number of operational failures, which saw Minister of Agriculture Lobin Lowe announcing its closure in August his year and sent all the employees on forced leave.

After the closure, the board announced its intention to retrench all the workers, an exercise which authorities say will cost government K8.9 billion.

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