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Controversy over Salima Sugar Company’s mill purchase

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Gift Trapence

As Malawians continue to demand accountability and transparency from public officers and institutions, the Human Rights Defenders Coalition (HRDC) wants the graft-busting body, Anti- Corruption Bureau (ACB), to investigate alleged fraud and corruption at the Salima Sugar Company.

In a letter dated February 11 2021 signed by HRDC Chairperson Gift Trapence and addressed to the office of ACB Director General, the rights body centres its claims on the procurement of a sugar mill and compensation of local inhabitants who were allegedly displaced by the sugar company.

But Salima Sugar Company, through a letter signed by Company Secretary Charles Thupi and addressed to Trapence, has tried to exonerate itself from the sugar mill deal. It points out that mill was procured under Letters of Credit (LoC) operated by Ministry of Finance of $100 million (which is about K79 billion at current exchange rate).

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“…and the contracts were awarded by the GoM [Government of Malawi] in 2012-2013.The Mill was installed by Apollo International between 2013 and 2015.Salima Sugar Company was registered on October 22 2015 and found the sugar mill in question already installed at the factory. We are therefore not privy to how the factory machinery was procured,” reads Thupi’s letter in part.

The company has also moved to clarify on the land compensation matter.

“Kindly also note that Salima Sugar is responsible for the development of 4000 hectares of land and Greenbelt Authority (GBA) is owner of the balance 2500 hectares of land of which GBA decides the land allocation. Salima Sugar found the allocations already done when we took over our portion of the estate in July 2017,” the letter reads.

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HRDC says that it has information that the sugar mill, whose actual cost is $15 million (K11.8 Billion present day value), was allegedly bought at $35 million in India (K27.6 Billion).

“We have information that GBA purchased sugar mill capable of crushing 1000 tonnes per day allegedly at $35 million in India. However, it is alleged that the actual cost of this mill is $15 million. It is alleged that the $20 million was shared between public servants and politicians,” reads the letter.

When contacted, GBA Public Relations Officer Maganizo Mazeze said the Ministry of Finance would be better placed to comment on the issue.

“The procurement of the sugar mill was done way before the establishment of the Greenbelt Authority in 2017 by an Act of Parliament. The entire process was done by the Ministry of Finance and we believe they are better placed to address the issues raised in the HRDC letter,” he said.

Ministry of Finance spokesperson Williams Banda equally tossed the ball to the Office of the President and Cabinet (OPC).

“Greenbelt Initiative was under the OPC and all the processes were done at the OPC,” he said.

There was no immediate comment from the OPC.

HRDC claimed that some public servants and politicians allegedly shared money that was meant to compensate local inhabitants who were displaced from the land where the sugar factory was planted.

When asked in a follow-up interview to reveal names of individuals implicated, Trapence was tight-lipped, saying he did not want to jump the gun.

“The questions being asked are exactly what ACB should investigate. ACB should do an audit as to who are the farmers who own plantations in Salima under the greenbelt. ACB should also investigate the sugar mill purchase from pricing to other related issues, including issues of contracts under greenbelt. This is the information we are getting through our whistle-blower initiative. It is important that these issues are investigated as they border on issues of accountability,” he said.

However, ACB spokesperson Egrita Ndala said the bureau was in the dark on the matter.

“The Bureau has not yet received the letter,” she said.

In January this year, HRDC also wrote ACB to investigate the Salima Sugar Company over allegations of tax evasion and money laundering but the company challenged the human rights body to provide evidence.

Salima Sugar Company is owned by the Malawi Government (40 percent) and Aum Sugar Company of India (60 percent).

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