Lawyer says Malawi can turn Mutharika’s Bineth into public trust
South Africa-based Malawian lawyer Professor Danwood Chirwa has said government will have to prove that former president the late Bingu wa Mutharika diverted public funds into his Bineth Trust which would add weight to its pursuit to turn Bineth into a public trust.
Attorney General Anthony Kamanga commenced proceedings for a declaration that the Bineth Trust is a charitable trust and for restoration of money that was withdrawn from the Bineth Trust accounts for purposes not in line with aims and objectives of the trust.
The government, if successful on the move, would make the Bineth Trust a replica of Press Trust established as a public trust but operated and used as the personal entity of Malawi’s founding president the late Dr Hastings Kamuzu Banda.
Asked by Nyasa Times to put his legal opinion on the matter, Chirwa explained: “A public trust involves the transfer of usually public resources to a person, institution or body to manage them for the benefit of the public. It is also possible for a private person to create a public trust from his or her private resources, as long as the benefit is clearly stated to be for the general public.”
He added: “A private trust involves the transfer of private resources to another person, institution or body to be managed for the benefit of private persons chosen by the creator.
“Where public resources are diverted for private use or benefit, and such diversion is proven, the trustees have a duty to account to the public for all those resources and additional value accruing from them. In other words, when such proof is given, the trustees immediately cease to act for the benefit of those private beneficiaries and start to act for the public. It also means that the public can remove them and appoint other trustees in their stead.”
Chirwa said government will have to prove diversion of public resources to create the subject matter of the so-called Bineth Trust.
He however hinted that the move can be successfully executed.
“We have precedent for a case like this, the Press Trust, which was reconstructed by an Act of Parliament in the mid-1990s. The government alleged that it was created by Kamuzu Banda seemingly as a private person but using money from party cards sales and then enjoyed advantages and privileges from the government which ensured its growth to a monopoly in the Malawian economy.
“The beneficiaries in the Press Trust case was the public. [Justice Dunstan] Mwaungulu set aside the Act on two grounds: that it was enacted without a quorum, and that it violated the private property rights of the existing trustees. However, the Supreme Court of Appeal held otherwise. It held that the quorum was necessary at the beginning of the parliamentary session. It also held that the trust was a public one in essence because its subject matter was derived from public resources.
“In [Bineth] case, the government will not be arguing breach of trust by the Bineth Trustees. It will be arguing that the the property held by this trust is public property or property derived from diverted public funds. If that can be proved, history is repeating itself,” enlightened Chirwa.
If government succeeds in the matter, it will leave the Mutharika family with almost nothing, including the imposing Ndata Farm mansion in Thyolo, as most of the late president’s property is under the Bineth Trust.
According to the signed deed title on the court record, the trustees of the Bineth Trust are the late Bingu wa Mutharika, chairperson, his late wife Ethel Mutharika, Peter Mutharika, vice-chairperson, Madaliso Mutharika and Duwa Mutharika, trustee and secretary.
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