EXCLUSIVE: Malawi firm in Panama papers, Press Trust Overseas Ltd

  • EDITOR’S NOTE:Panama Papers issue is ‘avoiding tax’ and not evading tax. Evade tax is when you don’t pay tax  you owe. Avoiding tax when you use the legal structures to reduce your tax bills. So whilst it may have moral questions, it’s not necessarily illegal. The difference is between breaking the  law, and not breaking the law.

An organization established through an act of parliament and run by political elites in Malawi, is registered in the tax havens of British Virgin Islands, Jersey and Channel Island.

Prof Mwanza: In PCL board

Prof Mwanza: In PCL board

Press Trust Overseas Limited, a subsidiary of Press Trust Corporation, is amongst the 214 000 offshore companies that were registered by discredited Panama based law firm Mossack Fonseca, documents seen by INK Centre for Investigative Journalism reveal.

Early this month, the International Consortium for Investigative Journalists and its international partners began reporting stories on the leaked 11.5 million documents that shows that the law firm Mossack Fonseca systematically assisted the rich and powerful to hide money and avoid  taxes.

The new revelation that a statutory organization, Press Trust Corporation, has used the discredited law firm since 2008 to handle its offshore services is stunning. As a public organization, its financial report and annual reports does not indicate that the company is registered in Tax havens such as British Virgin Islands.

Press Trust Corporation Limited has footprints in companies both listed and unlisted at the Malawi Stock Exchange ranging from banks, telecommunication, beverages and fuel service stations.

The main object of the Trust is to provide funding by way of grants, donations or contributions to any person or institution for charitable purposes which are in the interest and for the benefit of the people of Malawi including for the advancement of their education, health, social welfare and housing, it says on its website.

In the 2015 financial year, the Trust raked in almost US$3 million in revenue  but doled out almost US$700,000 in charitable expenditure.

The evidence

Evidence unearthed by INK Centre for Investigative Journalism, Centre for Investigative Journalism Malawi through ICIJ shows that the company was registered in the British Virgin Islands in May 26, 1999. The organization then appointed Switzerland and France based businessperson, Roger Ronald Matthews, to be its first director.

For more than a year Matthews ran the affairs of Press Trust Overseas Limited before seven other Malawians with political connections were appointed in September 14, 2000. Matthews was subsequently appointed the company secretary in July 2014.

The company (PTOL) got off the ground with US$50,000 worth of shares, according to the documents. But, as of March 31st 2014, had net assets of US$5.2 million after it had written off intergroup loans of US$8.7 million.

According to the documents the investments in the global capital and money markets are managed by IMARA Asset Management (Zimbabwe) Limited. IMARA also manages other 300 unnamed entities, mostly from Africa

The directors of the PTOL are persons of considerable influence in Malawi. They include former Members of Parliament and cabinet ministers. According to records provided by ICIJ, on July 17, 2014, the directorship of the organization significantly changed for the first time with former cabinet minister and well-known Malawian politician Prof. Peter Mwanza taking the leadership of the organization as chairperson.

Other directors were, Ben Chidyaonga, George Kayambo, John DS Gray, Esther Chioko and Nancy G Tembo.

Both  Mwanza and Ben Chidyaonga ceased to be Press Trustees after serving their maximum two terms of six years each. But they were shifted to Press Corporation Limited board to start other new terms as board members.

The current Press Trust Board has Dr. George Kayambo as Chairperson, Tony Kandiero, Esther Chioko, Nancy G Tembo, Mayer Chisanga, Wilson Chirwa and Jim Nsomba.

While the organization has never mentioned in its official documents that the organization was registered and domiciled in Tax heavens, this week the organization maintained that it was above board and that it has nothing to hide.

“PTOL was never formed secretly neither is it a shell company. PTOL was registered in the British Virgin Islands in 1999 under the International Business Companies Act (CAP 291),” said Chief Executive Officer Patrick Mhango in an emailed response.

Mhango further claimed the Reserve Bank of Malawi approved the foreign subsidiary’s incorporation and basis of operation in 2000. Mhango could not explain why the organization chose to invest in tax havens and not in other jurisdictions.

The  PCL oss further piggybacked on PTOL saying it has a clean slate and its accounts are audited by Deloitte Zimbabwe. He however did not back this claim with documentary proof.

Mhango even tried to gag the journalists for use of the documents on PTOL found in the Panama Papers saying they were confidential.

“Indeed, I have never heard of a company sharing its documents such as minutes with the public. Therefore, these will remain confidential to PTOL” he said.

Asked about the rationale behind investing in a tax haven, Mhango said that as far as they are concerned BVI is a credible jurisdiction in which to do business.

He added, “By the way, Press Trust being a public trust does not pay taxes either here in Malawi or indeed anywhere else. Therefore, the objective of PTOL was never to take advantage of the ‘tax heavens’. It was a purely commercial business decision to expand the investments of Press Trust globally in the well-established global capital and money markets”.

Asked about the organization’s association with Mossack Fonseca Mhango claimed ignorance adding that their legal counsels are Obelisk Secretaries Limited.

Press Trust Mauritius operation

Press Trust Overseas Limited, which is 100 percent owned by Press Trust Corporation, is domiciled in Jersey, Channel Island and British Isles but conducts its activities in Mauritius as an investment holding company, according to a copy of the declaration form from Mossack and Fonseca signed by Roger Mathews, Company secretary on 20th May 2015.

Alongside Bermuda and Luxembourg, Mauritius is a recognized tax haven where major Banks stash illicit cash according to non-profits U.S. Public Interest Research Group Citizens for Tax Justice and International Business Times.

The World Bank study of Illicit Financial Flows in Malawi and Namibia estimates that revenue lost to corruption and tax evasion accounts for between 5% and 10% of the GDP. Illicit Financial Flows include practices used to reduce tax liability and diminish a country’s revenue, such as tax holidays or transfer pricing.

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25 thoughts on “EXCLUSIVE: Malawi firm in Panama papers, Press Trust Overseas Ltd”

  1. Ivan Mark Radhakrishnan says:

    AVOID / EVADE = THEFT.

    Quit the semantics. AND, WHO ARE THE ‘PROFESSIONALS’ – the ‘bankers’, the ‘accountants’, the ‘auditors’, the ‘lawyers’, the ‘judges’ (if any) WHO FACILITATED the ILLEGAL EXTERNALIZATION OF MADE-IN-MALAWI DOLLARS to ITS – international tax scams?

    WHY IS MALAWI MADE MONEY paying TAXES OUTSIDE MALAWI and CREATING EMPLOYMENT OUTSIDE MALAWI?

    AVOID / EVADE = MASS DETENTIONS.

    The same bastards ILLEGALLY EXTERNALIZING MADE-IN-MALAWI DOLLARS to Panama, Switzerland, Cayman Islands, Jersey, Lichtenstein, Luxembourg etc CANNOT VISIT THESE COUNTRIES and / or European PRINCIPALITIES.

    Vote NO 2 RED; Vote NO 2 racism / Vote NO 2 exclusion / Vote NO 2 discrimination

    THEY ARE NOT ALLOWED TO ENTER THEM. THEY ARE NOT GRANTED VISAS. But they were still PAYING TAXES and CREATING EMPLOYMENT for people who DISCRIMINATE AGAINST THEM!

    HOW CAN YOU ILLEGALLY EXTERNALIZE MONEY WHEN WE HAVE
    UNDER-FINANCED CITIZENS AND TAX-PAYERS?
    UNDER-FINANCED HOSPITALS AND HEALTH FACILITIES?
    UNDER-FINANCED WORKERS AND STUDENTS?

    HOW? There is NO JUSTIFICATION for this crime. FINANCIAL-TERRORISM IS THE WORST TERRORISM OF ALL. FINANCIAL-SABOTEURS SHOULD HAVE EVERYTHING TAKEN FROM THEM AND THEIR FAMILIES. They are the cause of CRIMINALLY-INDUCED STARVATION and CHRONIC UNEMPLOYMENT

    WHO FACILITATED THIS CRIME FOR THE PRIMARY CRIMINALS?

  2. mwenye wa malawi says:

    Bring back our billions of dollars which have been hidden overseas by these cashgaters and our economy will stabilize. The Kwacha will appreciate; no devaluation. Even our presidents and MP’s have the same bank accounts abroad.

    Malawi is indeed a failed state and continues to self-destruct.

  3. Winston Msowoya says:

    I wholeheartedly conjoin with Donald’s assertion on Malawi film in Panama Press Trust Overseas.Frankly Donald has hit on the nail.The standard of the Malawian Journalists is appallingly below beau ideal,which needs to be re corrected.For instance,I have written a book on Malawi entitled : MALAWI,”THE LEGACY OF TYRANNY AND SHAME”.In this book,I had written on various kinds of topics from,tyranny,tribalism,neo-colonialism that engulfed Banda’s horrific betrayal of Africa economically and politically,the repartriation of the Northerners,from South and Central,Quata System,the beast incarnet,the land claims that led Banda to demand part of Southern Tanzania,East North of Zambia and huge patch of land from North West Mozambique.all this the poorly trained journalist,flashed a review of the book thus: NARRATING MALAWi’s HISTORY IN HYPERBOLES.The confused and under trained so-called Journalist who might happen to be my distant cousin Nicholas Magaga Msowoya was not happy with my revelations I quote one of his argots: “Instead of telling the story as it was,the book is highly interpretive and judgemental.However,I have no qualms with him ,I know Malawian politics is full of JEALOUSIES and HATRED and with him he was trying to defend a brother who is in Malawi Confusionist Party (MCP) with a high position in there.but I lived with his own brother in exile going by the name of Tojo Magaga Msowoya who was bitterly against Banda’s regime.So to give right information to the people of Malawi,we need in place sonorous journalists who can stand by their own integrity and not to be pushed around by unscarpulous bosses or bribed to write misleading materials.This review appeared in the Nation News Paper of August 6,2013.Thaks Donald for your vivid comments on our Journalists’

  4. Nguswigha says:

    These are so called journalists who get bogus certificates from bogus so called Colleges in Malawi. Just a Diploma in journalism will have different parts: Part1 diploma, part 2, part 3 >……………………………up to part 8. the same diplomakkkkkkkkkkkkkkkkkkkkkk Bogus malawian journalist. I believe Malawi Polytechnic does not offer these diplomas which are collected in sacks.

  5. Donald says:

    The Journalists in MALAWI are UNEDUCATED, UNPROFESSIONAL and lack the basic skills
    of reporting and proper grammar.. They are even corrupt and work according to who
    will give them bribes to do a story..

    MALAWI IS A FAILED STATE JUST LIKE SOMALIA.. ITS A WILD PRIMITIVE PLACE WHERE
    ANYTHING GOES..

    WE HOPE DONALD TRUMP TAKES OFFICE IN THE USA AND CUT OFF ALL AMERICAN AID
    TO MALAWI BECAUSE ITS A WASTE OF MONEY AND TIME

    A CULTURE OF CORRUPTION, XENOPHOBIA, RELIGIOUS BIGOTRY, JEALOUSY AND EVIL!..

  6. Kamano says:

    Do you think we are dunder heads that we need schooling on the contrast between avoidance and ivasion. We already know that the two terms are synonimous; by the way, why would anyone want to avoid tax if not to corrupt the country.

  7. Liquor says:

    Amene you do not see the relevance of this story please read this report by the “reputable ” Newsweek and see how these African capitalists reap you off http://europe.newsweek.com/panama-papers-who-are-real-victims-tax-avoidance-and-evasion-444144?rm=eu

  8. Jelbin Mk says:

    Mr Jika the writer began defining the difference between tax evasion and tax avoidance so i wonder what you’re trying to argue or explain. You are simply arguing for the sake of arguing and explaining for the sake of explaning. Comment if you understand the content not just for the sake of commenting, maybe you are one of those rigging our economy? Can’t you see that out of 3 million dollars only 700 000 has been disbursed is a joke of the purpose of the trust and anyway who has directly benefited from this trust and how if any? We need the trustees to explain to the public what is their mission because the trust was established with tax payer’s money.

  9. Amuna Anga says:

    Country without srategy

    Nothing wrong with Press trust oversees, umbuli amalawi

  10. charlie hebdo says:

    But whats wrong with stashing money overseas? Or cashgate? Or corrupting cops or corrupting the courts or stealing drugs from hospitals or giving passports to aliens or pilferage at MSCE exams or district councillors illegally pocketing millions of tax money or former presidents siphoning billions of kwacha or embassies stealing millions or road projects funding going to individual pockets or AIDS funding finding personal pockets or Henred Malawi Ltd going bust because of stealing from it or MRA letting in rich Asian budinessmen’s cars free of duty or allowing politicians ‘borrow’ big from MSB without tracing repayment or allowing public bank MSB to be sold contrary to public opinion or signing a secrecy code with Kayerekera uranium mine for purposes of stealing public tax or allowing politicians to buy MHC houses at give away prices or allowing politicians get away with Vwaza game reserve deal or allowing foreign Transporters to dominate local businesses or allowing public broadcaster MBC be controlled by ruling politicians or allowing Nigerian oil deal benew it the politicians or allowing government spy department NIB be run by rolling party or…….the list is unending. This is Malawi….

  11. Mopia Mloyiwa says:

    JJika, I agree with you 100 %. These journalists, we have in Malawi, are the worst you can have. Even the terms that they use, they don’t understand them. i wonder how it can be investigative when one is just speculating his dream, without having a basis. It is not evidence-based investigation. He lacks the rigour to do investigative study, yet he claims to be an investigative journalist. This report is rubbish. Is this what Poly is teaching.

  12. Pi says:

    In whatever way one looks at this, it has corruption written all over it. And damn right illegal.

    During most of those times, it was illegal for anyone to own a foreign account and yet this corporate legal entity did just that; its legally appointed directors were seriously guilty of vested interest and conspiracy by not divulging the truth to the Malawi Government (Revenue) authorities which in itself is unlawful.

    Just goes to show we may never get to the real bottom and extent of the cashgate quicksand!

  13. Wolusa wosauk says:

    Press corporation belongs to Malawians. Can somebody stop these thieves with a bullet….atienjeza

  14. Wa Polidi says:

    As you continue reporting to unearth this stealing a few questions to guide your investigation.
    Was the entity in panama filing any tax returns.
    Were there accounts opened by this entity?
    Who were the signatory?
    In any investigation… Follow the money…don’t expect acb to do this. How was money moving between Malawi press corporation and this entity…. Any payments that this entity paid?

    More later

  15. Ze Roberto says:

    @5. Don’t try to sound knowledgeable by introducing technical jargons here. Wether tax avoidance and tax evasion are the same or not what is important is the understanding of the motivation behind the foreign deals. Thsee issues are better understood by using a combination of wisdom and intelligence and not the latter alone. Remember, not everything that is legal is morally right. It is not uncommon nowadays to find criminals blaming the media simply because it exposes their underhand dealings.

  16. Clown says:

    This president is a thug, the government is full if thugs, the public sector is full of thugs, the profeesionals are thugs, the maskini are thugs. Everyone is a thug except for me and you!!!!!!
    Simple as that!!!!
    Ha ha ha ha ha ha

  17. chikopa says:

    This is what Bakili Muluzi and his chap Late Aleke Banda did in 1995 by snatching Press Trust Limited from Kamuzu Banda in what was known as Principle of Necessity in High Court to completely squeeze out MCP funding. People ululated and merry but all for a just a while as the reality started biting that Mudyomba was a dickhead. I am not surprised that billions of monies have been lost over the past sixteen years. The biggest question is, are there any consequences? The answer is Nope! There might be some yep yep here, yap yap there and thereafter die natural death.

  18. Kaya Kwathu says:

    Now this is stuff worthy report. Keep reporting until every little stone is unturned. Simplify the reporting until we, the so called gullible public, know the whole truth. Khuthulani zobisikazo. Wofi yayi.

  19. BigMan says:

    Much ado about absolutely nothing!!!!

  20. ntewa says:

    za ziii
    hear in Malawi people steal billions in broad day light and they are not arrested.Why waste time with oversea accounts.

  21. Kingsley Jika says:

    In journalism there’swhat we call ‘media alliteracy’, meaning having all the education but never been able to ‘read’ the news, i.e. never been able to isolate truth from mere newzak (emotion) to arrive at independent meaning. The way you have presented this article it’s as though you just uncovered some huge corruption. Mossack Fonseca (+ Zollinger) isn’t a disgraced law firm as you claim. Most of their dealings are lawful & British PM, Cameron, is a beneficiary from his late father, Ian’s investment in Mossack. Of course, it is said some used it to beat tax systems & economic sanctions, but the majority of their dealings are not as you put here. It is not necessarily an issue making some issues a secret in a trust. Tax avoidance is not a crime; tax evasion is. When writing, do thorough research & understand the type of audience & the conclusion they can arrive at if they buy your story wholesale. Great journalism should have at its heart the mission to build. Investigative journalism has its foundation in protecting ‘public’. Let us balance the hunger to expose with research & understanding of context, otherwise investigative journalism & this appetite for a local Bernstein will cease to serve the public.

  22. Zidura Ntengo Undigwere says:

    This has to be just the tip of the iceberg.
    And there is probably way, way more Malawi public money stashed in these tax heavens. Malawians have been suspecting this for years. Since the Kamuzu and his dictatorship, when he and his coterie didn’t even need to use sophisticated means to steal our money, and hide it in these tax heavens. The nation ends up the biggest loser!
    We’ll never get back our money, even if it is found. Because our legal system is so prone to manipulation, and many influential people are deep in these rackets. That’s my indictment, anyway. But I hope I am wrong.

  23. Zomwe akuyankhani a mhango simukukhutisidwa nazo?

  24. LIttle Bwana says:

    Typical. So typical. It was only a matter time until some Malawian ventures came out in the investigation. Everyone in the world who was found out to have assets held by Mossack Fonseca through the leak of the Panama Papers is saying the same thing. “I didn’t do anything illegal.” “I didn’t know.” “It hasn’t influenced my political decisions.” “I don’t have to talk to the press.” I may be a little bwana but I do have some common sense.

    The point isn’t whether this system is or is not illegal. If you have that much money your army of lawyers can make anything seem legal. Corporate criminals don’t go to jail anyway. The point is that this reaffirms to the rest of us that the economy is rigged, and those doing the rigging are making HUGE untaxed returns on their investments. The rich just get richer and ndife a mphawibe.

    Come to Kasungu and invest. I’ll keep your money for you and I can guarantee you will never hear of any Kasungu Papers.

  25. Paul says:

    NO SURPRISE… MALAAWI IS A CORRUPT EVIL SOCIETY

    DANGEROUS PLACE EVEN FOR VISITORS

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