The High Court sitting in Blantyre Tuesday dismissed the application of first and third accused persons Abdul Rehman Abdullah and Rizwana Abdul Rehman of Cotton Ginners Africa Limited to end the case they are answering of failing to pay back billions of Kwacha they borrowed from the government’s Export Development Fund (EDF) in a case dubbed Bank-gate.
The two wanted the court to end the case, saying, at the time EDF, a finance arm of the Reserve Bank of Malawi (RBM), loaned them the money, it did not have a licence.
State prosecutor Pirirani Masanjala said, when delivering his ruling in the chamber, Judge Sylvester Kalembera said there was no law requiring EDF to get a licence by the time the accused persons, operating as Cotton Ginners Africa Limited, were borrowing the money.
Masanjala said the case will be back in court on February 28, when hearing would continue.
EDF was reportedly defrauded $5 million [approximately K4,125 billion at the current foreign exchange rate].
Other major victims of the fraud are Standard Bank which was owed K8.5 billion, CDH Investment Bank [K4.5 billion], Ecobank Malawi [K3.5 billion] and National Bank of Malawi, which was owed K250 million.
Cotton Ginners Africa Limited proprietor Abdul Kader Patel instituted bankruptcy procedures to allow the company to re-organise itself and start repaying the loans but High Court Judge Michael Mtambo dismissed the application.