Malawi Savings Bank sale ‘blocked by injunction’

High Court has granted a temporary restraining order stopping the controversial sale of Malawi Savings Bank (MSB).

CEO for MSB Ian Bonongwe: Third respondent

CEO for MSB Ian Bonongwe: Third respondent

Ministry of Finance, Economic Planning and Development, through the Public Private Partnership Commission (PPPC), is set to conclude sale of between 51 and 75 percent shareholding in the bank, following failure to recapitalise it and adhere to regulations requirements by Reserve Bank of Malawi (RBM).

PPPC announced the designation of FDH Financial Holdings Limited, the parent company of FDH Bank, as the preferred bidder to invest in MSB and is offering K4.9 billion to buy 75 percent stake.

But MSB employees rushed to court  to prevent the transaction being completed.

High court judge Healey Potani granted the injunction on Thursday in the commercial city of Malawi, Blantyre through lawyer Michael Goba Chipeta.

Chipeta confirmed to Nyasa Times that indeed he is handling the case under the cause number 39 of 2015.

The lawyer said MSB workers want the court to interpret if the sale of the bank is in line with Public finance management act and Public Partnership Act (PPA).

He said the members of staff are worried that should the sale of the bank be illegal it will affect the contracts of the workers.

Chipeta said Minister of Finance is the first respondent, Public Private Partnership is the second respondent while Malawi Savings Bank is the third respondent.

Critics have argued that  proposed K4.49 billion price offered as an “epic swindle” and PPPC chief executive officer, Jimmy Lipunga, said the value of MSB needs to be revised and that will negotiate with the preferred bidder.

A legal opinion by renowned lawyer, Kamudoni Nyasulu, sought by the Budget and Finance Committee of Parliament, argues that the divestiture of MSB without parliamentary approval cannot go beyond 49 percent.

Nyasulu, who is managing consultant at KamudoniNyasulu, Law Consultants, opined that as a statutory body, MSB was “commercialised” and is therefore a “company” as defined by Section 2 of the Companies Act and or “State-owned enterprise” as defined by Section 2 of the Public Private Partnership Act.

“MSB is, therefore, subject to Public Finance Management Act, Public Audit Act and Public Procurement Act, which are subject to parliamentary oversight. Public property shall be disposed of by an Act of Parliament,” he said.

“The Executive cannot make law, but changing MSB from a statutory body to a private company without government controlling share, the Executive will be making law. Divestiture of such a body without parliamentary approval cannot go beyond 49 percent share. How much space was given to the consultation on public interest in this divesture?” queried Nyasulu.

Nyasulu’s legal opinion said courts can declare invalid, not just laws, but also decisions of the Executive that are inconsistent with the Constitution or any law.

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Vin mongu
Guest

i see drama unfolding which has put peabrain goodall in a fix, nanunsotu a goodall you will be cardiac arrested za zii ngati izi. lets see how they will behave with contempt of court issues if they sale the bank. ukalembenso kawiri grafitti yako ku cell. kukula mtima, iwe ungamamvere wapona kita? bonongwe send sheriffs anthu athamange patawuni mulli amete ndevu basi. MSB staff leak people and amounts owed.

kholowa mkabudula
Guest

Osangogulitsa ma share kwa amalawi eni dzikolino bwanji? Anthufe ndife opusadi eti? Kugulitsa china chilichonse kwa atsamunda basi?

connery banda
Guest

Let the parliament’s decision respected. The 4 billion can be obtained from the selling of ivory that is planned to be burnt by the government. After the bank deal what will be the next target? Dzikoli saligulitsa koma? Food for thought for all patriotic citizens

chamz
Guest

I don’t think it’s logical to smear mud at Thom and FDH. That man is a hard worker and he deserves what he has. the problem is the executive which wants to sell MSB in a
rush even when MPs and the majority of Malawians are against the idea. there is something sinister with the government. FDH is just a buyer.

Zikomankhani
Guest

MSB will eventually be sold to FDH; but this will not be the end of the matter. When a new government comes in 2019 or 2024 this issue will be revived. Biilionnaires who thought they could easily get their grubby fingers on a national asset will spend some time in jail. We must never forget how long it took before Sam Mpasu faced justice for Fieldyork…

DPP gurus did not learn any lessons from the two years they were out of power…power can be snuffed out in an instant.

Banda
Guest

If some of you guys think K4.9 billion is thieving, why didn’t you make a counter offer? It was a public sale and there was a reserved price and the buyers fulfilled all the requirements. And you are busy blabbing, change the law first.

special advisor
Guest
Shut up, Banda. Why does anyone want to sell MSB? Where is air Malawi, where is the her, where is stagecoach, where is MDC, where is b & c, where is viply… Let’s us be patriotic and use economics to better our society not just a few selfish selves. Tell me what we will benefit by selling MSB. If MSB has debts and liquidity problems it’s because a wrong man is at the driving wheel and unserviceable loans guaranteed by government or otherwise owed by powerful people in government or with strong political connections. This bank must not be sold.… Read more »
DMSF
Guest

The problem with Thom kuba anayamba kale with Zimbabwe saga and this man is also governor of RBM so that he controls even the president and leaving Malawians in totally poor and only the Thoms thinks are intelligent in the country
but time will come for FDH to vomit and not using the normal usual outlet.rather the other way round.

Makiu
Guest

Do you know that top management bought a fleet of top of the range motor vehicles like fortuner etc and sold them among themselves at MK1m each. Those poshy cars you see at MSB head office were sold to senior staff at MK1million each and they obtained injunctions to continue asset striping.

Wagona nkhule waliwa
Guest

Comment: DR WHITE, u are a lier. ln ur comment u say the civil service managers at MSB can not steer the bank into success? ls it the so-called MSB managers who got the debt of 5 billion from the bank ? ls not the Muli and others?

This bank should not be sold at all cost. lt is a statutory body and not a private company.

Dr White
Guest
Let the bank be sold, period! Malawians by nature are jealous of seeing a black man prospering. If it had been us whites buying you would be clapping hands. The sale of this bank was advertised, why didn’t you or the said employees buy it? It will not be the first bank to be sold. Commercial Bank was sold and is now a prosperous Standard Bank. The lazy civil service-like managers at MSB cannot steer that bank to success. They have failed. FDH, Ecobank and FMB are growing fast because of visionary leadership. By the way INDEbank is also being… Read more »
Juddaist
Guest

The bone of contention is not to sale or not to sale. I for one am of the view that MSB should actually be sold. However, the offering price of the bank is what is raising a lot of eyebrows. If you look clearly, you will note that government is acting in some haste to meet some RBM deadline when this date was known way back. The interests of everyone concerned should be considered; employees of MBS inclusive.

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