Malawi lawmakers are turning to the courts in an effort to block the sale of Malawi Savings Bank (MSB), describing the move as an attempt to rob the people.
Leaders of Legal Affairs Committee Chairperson Lewis Chakhwantha and a member of the Budget and Finance Committee of parliament Peter Dimba told reporters in Lilongwe on Wednesday that they will ask courts to stop the government from selling the bank, describing the move as an attempt to rob the people., the Daily Times reports.
Chakhwantha, a lawyer by training, conceded that much as Parliament does not have a legal backing to argue their case and the government has not flouted any law in the sale; MPs as representatives of the people they
have a locus standi which is the ‘right to bring action, to be heard in court, or to address the Court on a matter before it’
“We must understand that on the first place laws are made by people for the people. The paramount aim or objective of any written law is to serve the interest of people. So even if a law can border on technicalities or legal jargons, the spirit of the law is to serve to the interest of the people”, explained Chakhwantha, as quoted by the paper.
But spokesperson for the Treasury Nations Msowoya said the MPs have no basis to seek court redress because “the people to be protected are the Malawians who are also the depositors and it is the interest of these that government is trying to protect by inviting strategic investors.”
Public Private Partnership Commission (PPPC) on Monday opened tenders requesting strategic investors to buy a controlling stake in MSB in which the government owns 100 percent of its shares.
The MPs however claimed that it has already been set-up that Malawi’s fastest growing bank, FDH will buy the tax payer stakes in the bank.
The bank, founded in 2008, is a 100% subsidiary of FDH Financial Holdings Limited (FDHFHL).
“Government intends to sell the bank to few individuals including FDH Holdings at a give away price, when the bank’s assets as of November 2014 were in excess of K46 billion”, said Dimba.
Dimba sai Secretary to Treasury is issuing instructions to the government’s divestiture agency to offer FDH Bank the sale of MSB.
Said Dimba:”If the sale is sincerely by tender, why is the Secretary to the Treasury’s office issuing instructions to PPPC to sell the bank to FDH Bank and render the whole bidding process a farce when they have already concluded the deal behind the scenes?”
The sale of the bank has met resistance from MP who pushed a motion in Parliament last month halting the sale to pave the way for investigations on its viability.
The MPs argue that MSB is the only bank that has wide coverage in the country, especially in rural areas where their constituents are located.
The legislators also accused Finance Minister Goodal Gondwe of being dishonest for informing Parliament that government will halt the sale of the bank when the PPPC is proceeding with the sale.
According to Dimba, MSB already meets minimum capital requirements of US$ 5 million (K2.2 billion to reach the optimum capitalisation level which is ironically what some companies owe the bank,
He also said the central bank is deliberately inflating the capital requirement for the bank to be Base II compliant to K23.7 billion when in fact the bank needs only K5 billion to recapitalise to optimal levels,
“Government is making arrangements as part of the sale process to firstly, write off some toxic debt before the buyout thereby making Malawians repay the toxic loans,” he said.Follow and Subscribe Nyasa TV :