By Mandy Pondani:
[dropcap]F[/dropcap]iscal Police, in conjunction with Reserve Bank of Malawi (RBM) in Mzuzu, have uncovered a suspected syndicate of Malawian businesspersons said to have been involved in foreign currency externalisation and money laundering, among other offenses.
Six of the suspects, most of whom ply their trade in the border district of Karonga, were arrested on different occasions last week while some of their alleged accomplices are at large The Daily Times has gathered.
Court documents, which we have seen, indicate that, between January and September 2018, the suspects—Dennis Thindwa, Polly Kayuni, Mwendanayo Muyaba, Andrew Henjewere, Kondwani Kayombo and Daniel Mwakayinga—were found in possession of $680,000 [K498 million, $1=K733] which they allegedly obtained illegally.
The six appeared in court last week and six charges were levelled against them.
The first count of money laundering, which was placed on all of them, contravenes regulation 42(1) (c) of the Exchange Control Regulation (ECR).
In support of the charge, it is on record that they used an Ecobank account number 0093177004625401, a Standard Bank account number 9100001215512, a Nedbank account number 062010016415 and a National Bank account number 3846358, all in Mzuzu, to carry out the reported illicit transactions.
Money laundering attracts a maximum sentence of life imprisonment.
It is also suspected that the accused persons [separately] obtained forex from the different banks for a specific purpose but used the said money otherwise thus violating regulation 10(4) of the ECR.
Last week, the court heard that Thindwa and accomplices told the banks that he would use the forex to import cement which was never imported.
Through the alleged falsehood, Thindwa obtained $50,000, Kayuni $70,000, Muyaba $250,000, Henjewere $200,000 and Kayombo $77,000.
Obtaining forex for a particular purpose but using it otherwise attracts a maximum sentence of two years in jail.
Applying for bail last week, the suspect’s initial lawyers, Wesley Mwafulirwa and George Kadzipatike, told the court that the offences were bailable and that bail is a constitutional right.
The State, however, pleaded with the court that the suspects should remain in custody, arguing that money laundering is felonious and that they were not done with investigations.
But their new defence counsel, Christon Ghambi, corroborated the initial application when the matter returned to court for bail ruling yesterday that the suspects had been incarcerated for more than a week and that it is unjustifiable for the State to claim that they are still investigating the matter.
“It is a gross violation of human rights to arrest someone without valid legal reasons and start investigations later. The State should have arrested them after careful investigations,” Ghambi said in an interview.
Apparently, Chief Resident Magistrate Gladys Gondwe has granted the six suspects bail upon payment of K200, 000 cash bond and presentation of two Mzuzu-based bail sureties of K500,000 non-cash.
RBM spokesperson, Mbane Ngwira, Monday said the country loses K72 billion ($980 million) annually to forex externalisation.
But he said the bank, in collaboration with various law enforcing agencies such Fiscal Police and Fiscal Intelligence Unit (FIU), have put in place measures to curb the malpractice.
“I do not have full official information on this particular case but then it tells you how much we are doing to safeguard the country’s forex,” he said.
Recently, FIU Director General, Atuweni Juwayeyi Agbermodgi, told members of Budget and Finance Committee and Public Accounts Committee of Parliament that a recent investigation her office conducted revealed that $16 million [nearly K9 billion] was externalised in two years.
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