Former Cabinet minister Phillip Bwanali has sued the Agricultural Development and Marketing Corporation (Admarc) for suspending a deal in which the State grain trader had agreed to sell his firm, Aberdeen Farms, 3,000 metric tonnes (MT) of maize.
A court injunction that we have seen compels Admarc to continue selling Bwanali the maize until the issue is resolved.
But Board Chairperson of the State grain trader Alexander Kusamba Dzonzi said yesterday that they are investigating how the deal was reached before they could respond to the demand.
Dzonzi said the board had only learnt about the said contract and the injunction, dated July 17, 2022, on Monday this week.
In the order, granted by the High Court in Blantyre, Admarc is given an opportunity to apply to the court at any time to vary or discharge restriction.
“It is hereby ordered that an urgent relief by way of order of interlocutory injunction restraining the defendant from effecting their decision suspending the sale of white maize and cancelling part of the contract of sale of Malawi white maize between the defendant and the claimant be and is hereby granted.
“The claimant should file and serve on the defendant a notice application for an order of interlocutory injunction within seven days from the date of this order,” the order reads in part.
It adds that in the event that the State grain trader wants to fight the injunction, it should first inform Bwanali’s lawyers in writing at least 48 hours beforehand.
Dzonzi said in an interview that all along, the board only knew of two contracts, one about exporting maize to Zimbabwe and another to Kenya.
The Agriculture Committee of Parliament blocked the exportations on the premise that the maize was still needed within the country.
“After that, we asked management in black and white to give us all the existing contracts they had and they did but this one was not there.
“We are investigating this but as I said before, what was happening at Admarc was pathetic. There was no regard of corporate governance and this is the evidence. I cannot say much on the deal and the injunction itself at this moment because we have to sit down and see how we are going to deal with it,” Dzonzi said.
On the other hand, Bwanali’s lawyer Bob Chimkango said the injunction means that the contract remains in force and that his client can continue making payments and get the maize from Admarc.
Chimkango claimed that Admarc invited Bwanali to sign the contract while they already had a letter suspending the same contract he was called to sign.
“The contract was initially negotiated in May, 2022. By 16 June or so they [Admarc] told him they were doing a new contract and on the 24th, they invited him to sign it.
“On the 30th, they purportedly wrote him a letter to say the sale was suspended on 24th which was the very same date they invited him to sign the contract,” he said.
Chimkango added that Admarc had agreed to sell Bwanali the maize at K205 per kilogramme (kg) which was the prevailing price at that time which, bringing the total contract sum to around K600 million but that he had only paid for 1,000 MT of maize at the time of the suspension.
He further said his client had only collected 800 MT of the 1,000 MT he had paid for but Admarc stopped him even from collecting the remaining paid-for 200 MT.
“Also to note is that the maize had weighbridge differences such that he was due to get additional maize to make the 800 [MT] which did not happened,” Chimkango said.
He said Bwanali, who is into the poultry business, was buying the maize for manufacturing chicken feed “which is going to benefit the same Malawi population, so Admarc’s claims that it cannot sell the maze on account of food insufficiency do not make sense”.
Admarc suspended all maize deals after meeting the Agriculture Committee of Parliament and the Ministry of Finance who advised the grain trader that the country would harvest less than it did last year.
The meetings followed confusion which surrounded the State grain trader’s plans to sell 100,000 MT of maize to the Grain Millers Association of Zimbabwe.
Meanwhile, the government has directed Admarc to start selling maize in Likoma, Nsanje and Chikwawa with one person not allowed to buy more than 25 kilogrammes to prevent vendors from abusing the system.