By Isaac Salima, Mercy Matonga & Taonga Sabola:
Civil society groups have called on government to take immediate legal action against those implicated in financial abuse at State-owned company Egenco, including former ruling Democratic Progressive Party (DPP), which allegedly received payments from the company.
The recent audit report into the Electricity Generation Company (Egenco), which indicated that K6.7 billion was abused at the institution, revealed that the former governing party received K16.5 million from the institution.
“We noted that Mr. William Liabunya (CEO) authorised the payment of sums of money to a supplier/service provider for the benefit of the Democratic Progressive Party. The payments were not for business relating to Egenco,” the report reads.
In interviews with The Daily Times, civil society organisation (CSO) groups that focus on governance asked government to take legal action on the matter.
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Youth and Society Executive Director Charles Kajoloweka said those found culpable must be prosecuted.
“We know the individuals who were involved and those who were entrusted with this responsibility. They must be held accountable. That’s how we are going to stop this irresponsibility by controlling officers. We must increase the cost of corruption on individuals that are implicated beyond the institution, and we must begin to hold the individuals accountable,” Kajoloweka said.
Human Rights Defenders Coalition Chairperson Gift Trapence concurred with Kajoloweka.
Trapence said government is losing resources that could have been used for development activities through underhand dealings in statutory corporations.
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“We, as civil society groups, may be prompted to seek legal redress,” Trapence said.
Previously, CSOs, led by HRDC, took the former governing party to court for allegedly receiving K13.5 million from a public institution during a fundraiser duped Blue Night.
The event, which took part in July 2017, was held at Kamuzu Palace in Lilongwe.
Trapence added that the Director of Public Prosecution Masauko Chamkakala and Fiscal Police must weigh in on the issue and take requisite action.
Meanwhile, Attorney General Thabo Chakaka Nyirenda has said he cannot comment more on the issue as it is in the hands of the board.
“The board of Egenco and the shareholders would be better placed to comment. Suffice to say that criminal allegations raised in the report will be investigated further,” Chakaka Nyirenda said.
The report, dated February 13 2024 and titled ‘Report on Forensic Audit and Investigation of Alleged Irregularities’, was conducted by Mwenelupembe, Mhango & Company.
It was commissioned by the Auditor General as per the regulations outlined in Section 10 of the Public Audit Act of 2003.
According to the report, a big chunk of payments went to Mauritius-based firm Teligenta Limited and Lloyd Electrical, locally owned by Hussein Osman Nurmahomed.
Teligenta Limited is a company that was also controversially jointly awarded a contract to supply bulbs, alongside another firm, by Electricity Supply Corporation of Malawi (Escom), and got paid about K3 billion, just 11 days before a court ordered that a fresh presidential election be held in June 2020.
In the Egenco matter, out of the K6,751,830,584.75 which the audit report says was paid out by Egenco on contracts that were entered without following laid down procurement procedures, nearly K4 billion went to Teligenta and Lloyds Electricals.
The audit report disclosed that Teligenta only has one director and, yet, Egenco was dealing with it on high value transactions.
The report disclosed that when a telephone call was made to Mauritius by the auditors to inquire on some issues as they were conducting the audit, the line was cut upon introducing the subject.
The only two local companies the auditors said Egenco should have been cautious with owing to the background of the owner, businessman Abdul Karim Batatawala— whose contractual issues with other government departments have been in the public domain—are L & G Tools Engineering, which got a contract of about K3.5 million in March 2018 and Novatech Engineering, which was awarded a contract worth K56 million.
Other companies that earned big, according to the audit report dated February 13 2024, include Voith Hydro, CCGT, LLC, Atlas Copco, Silverleaf Computers, Circles Enterprises and Yokogawaa Electricals.
The contracts, according to this audit report, are being questioned because Egenco used the single source procurement method without the authority of the Public Procurement and Disposal of Assets Authority’s approval, among other unprocedural processes.
Another controversy the audit report has raised is a situation where Egenco was exposed to contempt of court.
There was a court matter between Midima Holdings Limited, owned by Ali Osman, versus Techfab International of India. On April 22 2017, Egenco entered into a contract with Techfab to build, supply, deliver, install and commission 30 megawatts diesel power generation plant and equipment for Lilongwe and Blantyre at a cost of $12,549,620.
On April 11 2018, Midima Holdings, which was not a party to the contract, obtained a freezing injunction from the court against Egenco in the amount of $905,598.19.
The court order required Egenco to pay Midima Holdings, but the power utility company did not and, instead, paid Techfab straight.
Measures were, however, taken to correct the situation and prevent Egenco from being in contempt of the court.
Putting up a disclaimer, the auditors said their work was performed as per the Terms of Reference and that the work did not constitute an institutional audit opinion in accordance with international standards of auditing.
“In the circumstances where we could not obtain adequate documentation, one should not rely on our work and report as being comprehensive as we may not have become aware of all facts or information that one would consider relevant,” they say.
