Parliament resolves against MSB sale
The Budget and Finance Committee of Parliament has recommended that government should stop the sale of Malawi Savings Bank (MSB).
The committee says the stop should be pending injection of K4.5 billion that is required to make it stand on its feet so that it meets Basel II requirements.
Committee Chairperson, Rhino Chiphiko said this in Parliament when he presented his committee’s findings on the sale of the bank.
“In the interim, management should be challenged to run the bank proficiently while, in the process, government should help the bank to collect its non-performing loans from politically exposed persons to strengthen its financial muscle,” Chiphiko said.
He added: “Thereafter, when the bank is in a healthy position, then it can be sold to the general public by listing it on the Malawi Stock Exchange. This will be through initial public offering.”
He said government should assist MSB board and management by forcing Mulli Brothers Limited (MBL) to pay its debts.
“If there are outstanding payments to MBL, government should pay Mulli Brothers through MSB as enshrined in the ‘Assignment of Proceeds’ arrangement between MBL and MSB. Government should, therefore, implement the spirit of the letter issued in July 2010 in which it confirmed government’s initiative to direct some of the initiatives through MSB,” Chiphiko said.
Loud cheers could be heard from the opposition side as Chiphiko presented the report.
Another recommendation of the report is that the courts have to exercise their independence and expedite the Mulli case, which the committee noted has been stuck in courts since 2012.
The report also says that the whole tendering process and sale of MSB should be handled by an independent entity, not the Public Private Partnership (PPP) Commission.
“Stemming from the then Privatisation Commission, the entity has not made sure that public assets fall in the right hands. Most of the privatised entities have shed jobs, made no tangible investments and have not operated in the interest of Malawians,” reads the report.
The report also says Reserve Bank of Malawi (RBM) should stop threatening to close MSB pending injecting of additional capital. It faults the RBM, for the situation at MSB.
“The regulator played a role to sink MSB because it gave waivers to MSB to grant loans to Mulli Brothers. In September 2010, Reserve Bank granted a waiver of credit concentration limit to Mulli Brothers of K1.6 billion through MSB. At the time Mulli Brothers had contracts of K2,589,544,144 with government to supply fertilisers, uniforms, sprayers, pesticides, teaching and learning materials and uniforms,” reads the report.
It says the RBM should immediately write-off all penalties and interests accrued by MSB since it is part of the problem.
“It is the wish if the committee to see that the issue of MSB is handled in the best interest of Malawians and not just to serve personal interests of some quarters within our society,” reads part of the conclusion of the report.
The MPs have since adopted the report.
A vibrant writer who gives a great insight on hot topics and issues