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HRDC wants government to probe Salima Sugar

HAS GOVERNMENT STAKE— Salima Sugar Company

Egrita Ndala

Human Rights Defenders Coalition (HRDC) has written Anti-Corruption Bureau Director General Reyneck Matemba and Malawi Revenue Authority Commissioner General John Biziwick to probe allegations of corruption, money laundering and tax evasion at Salima Sugar Company (SSC).

But Salima Sugar Company Thursday rubbished the allegations, describing them as baseless.

In a letter dated January 19 2021, HRDC says, during the Democratic Progressive Party regime, the Malawi Government— which holds 40 percent shareholding in SSC— guaranteed a loan of $18 million from Export Development Fund and another loan worth $6 million from CDH Investment Bank.

“It is further alleged that the company does not release financial statements and does not remit dividends to Malawi Government,” the HRDC letter reads.

The letter further says it is alleged that SSC is only licenced to produce brown sugar but that the firm illegally imports white sugar from Tanzania, which is then repackages for sale.

When contacted yesterday, Gwengwe acknowledged receipt of the letter but was quick to point out that his ministry would investigate the allegations of selling white sugar on the market.

He, however, said the corruption allegations would best be handled by ACB.

ACB spokesperson Egrita Ndala said they received the letter from HRDC on Tuesday and that they would review it as is done with all complaints.

“Necessary action will be taken based on what the review will yield,” Ndala said.

But SSC Secretary Charles Thupi Thursday described the accusations by HRDC as false.

He said SSC did not take an $18 million loan from EDF, adding that the $6 million loan from CDH was not obtained by SSC but Greenbelt Authority and was guaranteed by government in order for SSC to develop irrigable land for medium-scale farmers and small-scale farmers.

Thupi said SSC Limited is an implementing agency and that, so far, 1,400 hectares out of 2,000 hectares have been developed. He added that the land developed will, according to terms of the agreement, be given back to the farmers after eight years.

“Salima Sugar Company has no import licence and therefore has never imported white sugar from any country and repack for sale in Malawi or any other country. Salima Sugar produces brown sugar and does not produce white sugar. The brown sugar produced is sold through distributors. HRDC should verify with their source and bring evidence.

“Salima Sugar like any other investor has a tax holiday on imports for machinery for sugar production and irrigation machinery. We are, however, tax-compliant on all taxes i.e. Paye [Pay As You Earn], withholding tax and other taxes not covered in the tax holiday. MRA normally checks our tax compliance in accordance with our [Malawi’s] taxation laws,” Thupi said.

On the allegations of not buying sugarcane from farmers, Thupi said SSC has been buying sugarcane from medium and small-scale farmers since its inception through their associations, mainly from within Salima and Nkhotakota.

SSC employs over 4,000 labourers annually and has 200 permanent employees.

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