The sale of part of Mulli Brothers Limited (MBL) properties by Malawi Savings Bank (MSB) risks facing more obstacles as some smallholder tea farmers from Thyolo and Mulanje have charged that MBL does not wholly own Chitakale Estates and the Smallholder Tea Company (Steco).
Mid May, MSB put up for sale MBL properties – including the two assets– which the bank initially valued at K3.3 billion, in a bid to recover outstanding loans which MBL obtained from the bank.
Early last month, the Supreme Court of Appeal gave the two parties 14 days to re-examine the properties after MBL obtained an injunction against the sale, and the re-evaluations came up with different values for the properties.
Supreme Court Judge Dunstain Mwaungulu is expected to make his ruling on the re-evaluation on July 9, but the concerned farmers still maintain that the said portions of the properties cannot be sold.
In a petition addressed to Speaker of Parliament Richard Msowoya, the tea farmers are arguing that the two assets were initially wholly owned by them before the majority of the shares were dubiously sold to an individual.
According to a 2007 Memorandum of Understanding (MoU) between Steco Limited and Smallholder Tea Growers Trust (STGT) and Mulli Brothers, which we have seen, upon successful conclusion of negotiations between Steco and Mulli Brothers, it was envisaged that STGT and Mulli Brothers should enter into a shareholding agreement.
“Steco will have a Board made up of 7 directors, 5 to be appointed by Mulli Brothers and 2 by STGT. The chairman will be appointed by Mulli Brothers,” reads part of the MoU prepared by lawyer Kalekeni Kaphale, signed by representatives of the three entities.
According to the MoU, Mulli Brothers was prepared to make a conditional offer to invest K90 million for 4.5 million shares in Steco at a valuation of K20.00 per share.
The petition which is signed by Wilfred Kasitomu from Thyolo and Collins Kazembe from Mulanje – apparently on behalf of 15, 000 smallholder farmers – demands that MSB should exclude Steco and Chitakale Estates from the proposed sale of MBL assets “since Mulli is just a partner”.
“Farmers wonder why Mulli Brothers used Steco and Chitakale as collateral for obtaining a loan from MSB which never benefited the two companies. The proposed [sale] of Steco and Chitakale remains an issue uncalled-for because the investor (Mulli Brothers) failed to run the two companies…
“[Mulli Brothers] failed to pay farmers approximately K70 million for green leaf sales and annual bonuses. He has failed to pay employees. He has failed to implement some clauses in the MoU like not publishing audited accounts,” reads the petition.
Chairperson of the Agriculture Committee of Parliament Felix Jumbe –who received the petition on behalf of Msowoya – said by writing Parliament, the farmers had exercised their democratic rights on matters that concern them.
He promised that at an appropriate time, the petition will be tabled in Parliament so that the lawmakers should scrutinise it. And since Parliament rises today, it is hoped that the petition will be tabled in the next meeting.
Meanwhile, government has finally sold MSB to sole bidder First Discount House (FDH) Holdings Limited in spite of intensive resistance from some quarters particularly the MPs.
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