SALIMA SUGAR FRAUD

BY MERCY CHAGUNDA

Senior government officials under the Peter Mutharika administration, including politicians and top civil servants, allegedly received dubious payments amounting to K1 billion from the partially state-owned Salima Sugar Company Limited (SSCL) as part of a cobweb of financial mismanagement at the company, contents of a leaked audit report into the company’s financial performance has revealed.

Audit Consult auditors discovered minutes of a board meeting in which SSCL’s Chairperson, Shiriesh Betgiri, and Dr. Sahin agreed to make payments in US foreign currency, suspected to be from an inaccessible foreign bank account. 

The total agreed upon was $875,000 in US dollars (equivalent to approximately 1 billion Malawi Kwacha) and K60 million in Malawi Kwacha. The highest individual payment, $325,000 (equivalent to K376 million), was allegedly made to an official identified as HM, with the payment scheduled for April 2020.

Another official, identified only as ST, was designated to receive K60 million in local currency. It’s worth noting that “ST” often refers to the Secretary to the Treasury, and at that time, Ben Botolo held that position.

The audit report states, “Chairman Betgiri and Director Dr Sachin B Nikam engaged in corrupt practices by defrauding Malawians of over US$875,000 and K60 million, respectively. The two directors allegedly collaborated with public officials and individuals mentioned in the report to commit fraud.”

Both Betgiri and Nikam could not be reached for comment immediately. The lawyer for Betligri, Wapona Kita, refused to comment on the matter.

“I have no instructions to comment on the matter,” said Kita.

PIJ has also contacted former senior officials in the Democratic Progressive Party-led government directly involved in the affairs of the company for comment. Those include former Chairperson Joseph Mwanamveka, who could not be immediately reached before going to press. 

While some officials were allegedly paid allowances, some received one-off payments in US dollars whose purpose could not be identified. 

Even more intriguingly, the names of the officials were not listed in the accounts records when the payments were made, with the company only recording initials suspected to be job titles of the officials paid.

“Some of the unrecorded petty cash vouchers did not specify the names of the person withdrawing the cash. 

The report further raises other governance irregularities at the company, including alleged acts of negligence and abuse of office, as evidenced by the company’s further payments to fictitious directors and the provision of unexplained benefits to senior employees. 

Fiscal Police arrested Betigri in July in connection to the alleged tax evasion and money laundering at the company, and the report will likely end in more arrests. 

Sources close to the investigation confided to PIJ the names of the officials suspected to have pocketed the money. We cannot publish the list for legal reasons. Still, it includes three former cabinet ministers, two senior government officials and a former chief executive officer for a state-owned company. 

“Arrests are likely soon. The matter started when the company wanted to obtain another sovereign guarantee for a loan, and the Finance Minister (Sosten Gwengwe) expressed reservations. The Attorney General was asked for a legal opinion and flushed out some of the questionable issues. He (AG) then called for an audit to provide forensic findings,” said an official close to the investigation.

AG Thabo Nyirenda refused to comment on the matter when contacted. “Do you want me to comment on a leaked report?” Nyirenda said when contacted.

In a move signalling political interest in the matter, the Secretary to President and Cabinet (SPC) released a statement on Friday acknowledging the government recipient of the report.

Betigri attending a court session after his arrest in July 2023

According to the report, from September 2018 to April 2023, some officials from the Green Built Initiatives (GBI), Justice Lloyd Muhara, Grey Nyandule Phiri and Ben Botolo attended meetings as directors from the said date until April 2023 without any official appointment as directors.

“According to the company search results 2019, all GBI remained directors of Salima Sugar. However, new faces from the GBI started attending board meetings; Justice Lloyd Muhara, Secretary for Agriculture, Irrigation and Water Development and Secretary to Treasury attended the meeting on 26th September as Directors. Mr Grey Nyandule and Ben Botolo attended the meeting on 8th January 2018 going forward as directors.

However, we received no evidence to suggest that GBI replaced its directors as from 2017; the first directors remained directors as of July 2019, and this has been the case as of March 2023, implying all GBI directors who have been attending board meetings from 2017 except DR. Henrie Njoloma were not appointed as directors, rendering remuneration and allowances received as illegal,” reads part of the document.

In an interview with PIJ, Nyandule Phiri acknowledged attending meetings while in service but said he stopped when he retired. He did not comment on whether he felt the participation was illegal.

“When I was in the service, I might have attended some meetings, but after retirement, I couldn’t, and I moved out of agriculture in July 2020,” said Phiri.