Steps to liquidate Alliance Capital

Reserve Bank of Malawi faulted, identifies forensic auditor

Ralph Tseka

By Justin Mkweu & Chimwemwe Mangazi:

The Reserve Bank of Malawi (RBM) has identified a forensic auditor, Grant Thornton Consulting Limited (ACL), to audit transactions of Alliance Capital Limited as part of its liquidation process.

The move follows a commercial division of the High Court’s judgement last week that the company should be wound up for failing to meet dictates of being a sound financial institution to operate in Malawi.


In a statement issued Thursday, the central bank, acting as the liquidator, indicated that it will also prepare a statement of affairs for the company, collect proof of debt claims and meet investors.

“All persons who have claims against ACL are requested to file their claims with the liquidator’s office and provide supporting evidence within 60 days from the date of the press release,” reads the statement.

On Tuesday this week, Minister of Finance and Economic Affairs Sosten Gwengwe told Parliament that the Attorney General Thabo Chakaka Nyirenda and Director of Public Prosecutions Steven Kayuni have moved to institute criminal investigations into activities that led to the liquidation of ACL.


Gwengwe added that the liquidation aims to compensate those who invested in the company, starting with individuals down to institutions whose investments have gone down the drain.

Court documents show that the company had a negative capital of K393.39 million, against the recommended K50 million.

Meanwhile, corporate law expert, James Kaphale, has expressed doubt that investors and creditors of the wound-up firm will get back their money.

He emphasises his stance considering that the company’s capital assets were over -K393 million against client funds at K21 billion.

Among other things, the court heard that, by the end of September 2021, the company owed its clients almost K25 billion but, by the end of February 2022, the company was owed around K23 billion by parties to whom it had advanced facilities using clients’ funds without their mandate.

“All in all, I am of the considered view that the Registrar has managed to prove, on the requisite standard of proof, that the company is insolvent and further that it is not likely to return to solvency within a reasonable time. I, therefore, order that the company be wound up.

Kaphale said corporate governance principles were not followed by the Registrar of Financial Institutions; nevertheless, clients of the company cannot pursue legal suits against the office.

“Had it been that the registrar was astute in discharging his duties, the situation could not have reached that extent,” Kaphale said.

RBM spokesperson Ralph Tseka said the determination on what the creditors and investors will get back will be made once all the information on assets and liabilities of the company is consolidated.

He said the company had been secretive on its shoddy dealings.

“Some of the deals were not known to RBM. They were reporting to us in terms of returns on a quarterly basis but they were hiding some of the information,” Tseka said.

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