Ntata on the governance side of Malawi Savings Bank sale

It is easy to celebrate. After all, who doesn’t like a good party? I have observed, however, that parties are often a distraction, something to divert our minds from matters that need our attention. I have seen couples go for anniversary dinners when there are issues between them that need addressing- in the hope, perhaps, that the issues will sort themselves out, or perhaps in the desperate need for a moment or two of a carefree feeling and some reveling. Unfortunately however, the tactic never really works, for in the morning the problems are still there, and they now have to be faced while dealing with a hangover.msb cashgate

In this regard, Malawi can spend MK300 million celebrating independence, but in the morning, the hole left by the MK300 million expenditure will have to be filled, and the nation will still need to address the governance issues that have come to the fore with the sale of MSB bank, cashgate and all other governance failures. Don’t get me wrong. I believe there is a time to make merry and celebrate just like there is a time for everything under the sun. I just think that when it comes to independence celebrations in the Malawian sense, what we should really be celebrating is simply the right to be called a nation, and the freedom to choose our own oppressors. Not independence.

Now let me discuss what we can learn about governance from the MSB sale fiasco.
The truth about the MSB sale is that unscrupulous politicians and greedy individuals run roughshod and fleeced the company millions in a well-crafted scheme that was meant to run it down and then cheaply buy it off. The people behind the strategy included former CEO Joseph Mwanamvekha, former Reserve Bank Governor Perks Ligoya, Mulli Brothers CEO Leston Mulli, and Late President Bingu wa Mutharika himself. In recent times, new players such as the CEO of FDH Bank and other players at the State House, including the current president and his Personal Assistant, of course, had to be roped into the scheme.

Economics books will have to be re-written because we now know from the recent MSB issues that a government and a bank can actually aid a borrower to act in a risky way, both of them with full information that the risk will be assumed by a third innocent party, the Malawian taxpayer in this case.
Events that eventually led to the disposal of a national asset, the Malawi Savings Bank are a failure of good governance, and are once again a reminder to all well-meaning Malawians that our leadership tends to have strong affinity for corruption, cronyism and sometimes, outright racketeering.

That MSB has now been disposed of is water under the bridge but for the country to avoid repeating this mistake, we need to learn from what exactly happened for a healthy public asset to go bust that quickly and auctioned at near salvage value.

Mulli Brothers Limited (MBL) acquired a loan from MSB during the time that Joseph Mwananvekha was CEO of MSB (he later became Secretary to the Treasury) and Perks Ligoya, Governor of the Reserve Bank of Malawi and Registrar of Financial Institutions. Mr Leston Mulli, the owner of MBL was a known sympathizer of the regime that time. He also happened to belong to the powerful tribal grouping that had Late President Bingu Wa Mutharika as patron. It is not a secret that both the CEO of MSB-thereafter ST- and the governor were part of that tribal grouping.

To understand the power and importance of being associated with the Mlakho Wa Alhomwe, one only needs to know that the former RBM boss though from Thyolo is actually a Mang’anja and not a Lhomwe but had to be seen to belong to the powerful tribal grouping.
The MSB Loan, based on available facts, is a perfect example of how cronyism, coupled with bad governance, and an arrogant and corrupt administration is the perfect concoction for those in power to play Russian roulette with national assets.

The MSB loan given to Mulli Brothers Limited was designed to fail.

As CEO of MSB, Joseph Mwananvekha had to approve the loan to MBL. Because the amount of the loan, for a single MSB client, was significantly large when compared to MSB’s balance sheet, the Registrar of Financial Institutions- the same person holding the office of Governor of RBM- had to give an approval and a waiver under the single client exposure rules for banks in the Malawi.

As if that was not enough, the powerful individuals involved in the deal pressured government, the majority shareholder in MSB to provide a sovereign guarantee for the MSB loan. Our government quickly obliged for they couldn’t deny the powerful MBL which at the time was supported by the President himself.

In 2009, the CEO of MSB, who had approved the MBL loan was appointed Secretary to the Treasury on secondment from MSB. Effectively, while he continued to be CEO of MSB- because that is where he continued to draw all his salary and benefits from- he was, by virtue of being ST, chairperson of the MSB Board because government was the sole shareholder. Thus on the one hand, he was making decisions as MSB CEO while on the other, reporting to the MSB Board where he was chairperson. In actual fact, he enjoyed the unusual privilege of reporting to himself.

With a sovereign guarantee for a private loan that was waived by the Registrar of Financial Institutions in terms of single client exposure rules, it became obvious to MBL that it could walk away from the loan because any such risk was indemnified by a sovereign guarantee issued by the Treasury. After several years, and because of unpredictable political developments that compromised the performance of MBL, the company indeed defaulted.
It must be obvious, however, that for the loan to reach the point of threatening to break the bank, the MSB CEO of the time and the ST, who was one and the same person (Joseph Mwanamvekha), and the Registrar of Financial Institutions (Perks Ligoya) must have known that the MBL portfolio was not performing.

Those with knowledge of the Malawian financial system are in chorus that MSB should have in fact been disposed of a couple of years back because of this MBL loan that was designed to fail by the events we have outlined above. There are even questions of whether this was not in fact a conspiracy aimed at running down the bank and acquiring it for a song. It is now an open secret that the Late Bingu wa Mutharika, at the height of his powers, desired to own a bank. Was this the strategy, and is what is happening now simply fulfilling a plan that he set in motion?

There are questions that should still linger on many minds as we learn yet another bitter lesson from the MSB saga. Why should the Treasury provide a sovereign guarantee for a private loan? If they can do so, what are the circumstances that warrant an implicit bailout for a private entrepreneur with public funds? Why and how did the Registrar of Financial Institutions fail to see a clear conflict of interest and a huge governance problem in dealing with an ST who was still CEO of a bank that the registrar is supposed to regulate? Indeed why did the Registrar of Financial Institutions fail to consider the governance implications of this transaction? How could he fail to exercise his operational independence and see that a loan facility to a Politically Exposed Person (PEP) would be a regulatory nightmare and a recipe for panic in the financial system especially when you are the same person that waived single client exposure limits?

As a final observation, I am aware that the President has weighed in with all sorts of assurances that the bank will recover its loans and that special debt collectors will appointed and so on. But this is rather convenient because the upshot of the sale is that the bank’s ownership now seems to be in private hands that seem to be strongly connected to the ruling DPP. We can talk about how a government shouldn’t run a bank all we like, and we can debate the economic sense of the sale all we like. The bottom line is that a perfectly functioning public asset was run down so that politically connected individuals could benefit at the expense of the poor Malawian taxpayer. It is a governance travesty. Period.

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57 thoughts on “Ntata on the governance side of Malawi Savings Bank sale”

  1. henry nyanda says:

    i would like to ask you Mr Ntata. As you have rightly said, this governance issue relate to the period of Bingu regime in which you were part of and most importantly a legal advisor to the government and even the president himself. The question is, did you at any time take an advisory role in these matters or you never saw them at all when you were there. Are you seeing this now. I believe you should have pointed this out at that time coz you had the powers to advise government.

  2. Chigawenga says:

    Malawians will never see a penny from either Mulli or any other creditor. What we need are suicide bombers that will take these greedy corrupt bastards one by one. I mean it and ready to do it. Enough is enough

  3. hst says:

    A dpp can you for once prove your so – called detractors wrong. Please vindicate yourselves just for once. As fate has it, all indications are pointing towards disaster. Mukutitukwanitsa anthu inu. I thought you have advisers. Don’t they see things clearly falling apart? The evil that men do lives after them. Please learn from your recent past.

  4. mwazisi boy says:

    its a pity that evil leaders still rule us. Energetically they speak of their gud plans for us while triumphatically they are robing us All evil doers will sually perish…..i think we really need federal gorvmt so that wise minority should not suffer because of stupid majority

  5. Ntata you rest my case.

  6. Maida says:

    Ife osauka ndikumangosaukabe. Your tym is nanunso Muzakila nyanja mystical ajawa

  7. tsetsefly says:

    DPP a party of witches and wizards. We are waiting for the time when you will commence your art of butchering then we in the civil society will do the needful that causes cardiac arrest to the Godfather of cashgate.

  8. John says:

    Whatever doubts or questions you raise on this article,Allan Ntata is telling the truth and I urge him to go deeper and expose these people who are greedy and do not love this country.They have plunder the resources of this country and they deserve to be severely punished unless they repent publicly and stop robbing this country where the poor malawians are suffering the most.
    They used the loan to rip off the billions of FISP money,they gave each other government contracts in all key ministries even money from the medicines burnt during the July2011 demos for which MULLI claimed damages from govt. To further drain govt funds for nothing,the Chikangawa forest which MULLI ripped off again.I can go on and on The question is how much does he want to impoverish govt? How long are malawians going to tolerate this plunder of govt resources? How long are malawians going to keep quiet and suffer suffer and suffer at the hands of these thieves.Parliamentarians what are you doing?

    doing,the Judiciary, what are you doing? The blood of the poor malawians is on you who are entertaining these corrupt people. What are our Judicial officers doing and how long should it take you to conclude straighforward cashgate theft cases? Why are you deliberately complicating theft clear theft case ps with money laundering cases which you know are mere delaying tactics? question is

  9. Kennedy nali says:

    Well done NTATA, malawians did not vote for peter. Let us not point fingers neither blaim the south, central or north instead let’s learn a lesson and find a solution for a better tomorrow. To those in love of malawi prepare for wise voting in 2019 its only one way of getting rid of this. Surely dpp ridged the vote, the question is can we stop them in 2019????

  10. Zitule says:

    The sale of MSB is like committing rape and later kill the victim to conceal the evidence. Thom Mpingajira’s character is suspect. Any sensible business person would have withdrawn from such a toxic deal. This bank will one day be nationalised. The culprits will answer for their sins in a court of law. In the next elections I will vote for a party that will put in its manifesto restoration of the bank to the tax payers who are its rightful owners.

  11. M'Malawi Weniweni says:

    My only comment is that MSB was not bought for K9.5bn as stated by Minister of Finance. The big portion of the Money paid ny FDH Holdings is further investment in MSB that will benefit the new owner. Malawian as shareholders only got less than K5bn from the sale

  12. First offender says:

    Tikusakasaka tikupeza sungamayaluse boma choncho ayi ugona polekera

  13. First offender says:

    From a lawyer to a journalist kkkkkkk amwanamveka ada Mulli mwamuwona mwanayutu akujaira timpange zomwe tinamupanga Chasowa bwanji?

  14. Aron says:

    People in Malawi they don’t mind they are used to poverty as long as they have nsima it’s okay

  15. Nyirongo Batwell says:

    Allan Ntata can you also write about Inde Bank. Tell us whether George Patridge is a lhomwe. May be IndeBank lent money to some politically connected people. FINCOM was sold to Nedbank you didnt make noise; Commercial Bank of Malawi (CBM) was sold to Stanbic which changed to Standard Bank no noise. Koma kungogulitsa ma share kwa mMalawi a lot if envy and hatred. Paja ndi ku Malawi kuli njala, nthenda, nsanje. If the shares were sold to azungu there wouldnt be all this noise. Then there is this fallacy of thinking Thom Mpinganjira owns the whole FDH. For you info Old Mutual using money from pensioners who are Malawians owns 40% of FDH; employees own 5% and Thom owns 55%. The other 25% of MSB will also be owned by Malawians. This is what Ntata is deliberately avoiding saying. Kaduka.

  16. Nyirongo Batwell says:

    Allan Ntata can you also write about Inde Bank. Tell us whether George Patridge is a lhomwe. May be IndeBank lent money to some politically connected people. FINCOM was sold to Nedbank you didnt make noise; Commercial Bank of Malawi (CBM) was sold to Stanbic which changed to Standard Bank no noise. Koma kungogulitsa ma share kwa mMalawi a lot if envy and hatred. Paja ndi ku Malawi kuli njala, nthenda, nsanje. If the shares were sold to azungu there wouldnt be all this noise.

  17. PIERRE says:

    We voters must read this article and keep it until 2019 inorder to vote wisely.The government is full of thieves who simply rotate positions .May the article be written in chichewa please for a voter who don not read english.I tell u mr presd u will bust soon,how can sell msb to urself just like that?

  18. Malawian says:

    Malawi @ 51. Amphawi angovutika inu mukusunga ndalamazo.

  19. Amuna says:

    Allan, you are so brilliant. Keep Malawians eyes open.Mbavazi zationjeza

  20. captain says:

    Ntata was there so he is the person with right information. Salute bro

  21. mo says:

    Civil servants are pipo whom you can’t understand and trust, this man called pitala is spending money enjoying yet all those employed by his boma have nothing, apolice,army,nurses all you guys drop your tools bwana amayenela kukhala oyamba kuwonetsa chitsazo,he is merry making inu muli kukamwa yasaaa mulibe olo five kwacha ndasanve wina kuti ndimubwelekeko kwacha

  22. Domingo says:

    Inde Bank had to be sold to make it look like a clean deal so that the claim that govt has no business running banks make sense. Thanks Ntata for the good analysis we need more of these, I hope these dunderheads know that we are watching. You can fool some people some time but you can’t fool the people all the time. Time of reckoning will come.

  23. Lord Denning Chatsika says:

    Good article but ntata learn to write short articles we dont have all the time for reading long articles remember we are poor and the little time is for looking for food and ee have no energy to read long articles no matter how good

  24. Life says:

    Bravo Ntata. You are the man. This is a level headed analysis that only a coach-sized-brain would fail to follow and understand. Its so sad that with such clear information, Malawian’s will not demand restitution. Malawi, the never to develop country…Soon and very soon, God will intervene, and when he does, is in a humongous way. BELIEVE me!

  25. Cashgate1 says:

    First article I have read on Allan. I agree with others, frustrated or not frustrated good analysis, unfortunately as others have said, Malawians are taken advantage of because of our love for mediocrity. Our nation will still be 51 years backwards as compared to other nations. When you have travelled to other countries its when you acknowledge how poor we are. Unfortunately, a few individuals know how to destroy or plunder our national resources, they duped us on Kayelekela, and other minerals. They robbed us on every opportunity that Malawi would have moved forward. But alas we are as cool as they expect us to be. I cry for Malawi.

  26. angozo ndi abanda says:

    thats great!

  27. enidziko says:

    Wow,wow,wow! Indeed a mockery from the undesirables, corrupt to the core people in our beautiful nation. We need to flush them out sooner than later. Malawi stinks just because of these people.
    The world is watching. What a waist and disposable land she has become because of these knobheads.
    Thank you Commando Ntata for a good write up with the eagle’s eye view and undoubtedly more idiots wont be happy because of your unprecedented deep truths unveiled. They will be calling shots on you.God bless Malawi.

  28. Pyola says:

    Good anaylisis Ntata

  29. MULHOPWANA says:

    Well articulated Mr Ntata, well taken.
    Malawi z, strangely, probably the only African nation that believes and takes pride in unscrupulous and selfish leaders……Funny enough, the mighty EVIL DPP will “win” again the 2019 Gen. Elections simply because Malawians enjoy POVERTY and always dream of MEDIOCRITY. May God have Mercy on this PPOR land, and its poverty obsessed citizens.

  30. Idulusi Issa says:

    Mwanamvekha is an outright thief who should be locked up sometime in the future when the DPP finally relinquishes power. It is uttuer stupidity for these thugs to even think that they shall govern in perpetuity. Time shall come when they shall leave and God firbid it is not a person who lothes their guts like I do, they will languish in jail if not in exile!

  31. Kenkkk says:

    Totally agree with you Alan but you have opened up another can of worms. The sale of msb is done but what we want now is that mulli and other heavy debtors should pay back our money to the govt.

    We should keep on putting pressure on this dpp thieving govt to tell how and when these debts will be paid back to the govt or tax payers.

  32. Freddie Nyirenda says:

    How do you expect a poor country like Malawi to develop with these levels of corruption persisting with every regime in power. When will this cycle be broken?

  33. Njuchi ya Boma says:

    Going into a crisis. Munthu akamafa umayamba ndi mkhutu kugontha

  34. chifwede says:

    Finally, Z Allan Ntata talks something very sensible.. Whether you are writing as a DPP frustrated man or not this is a good analysis why govt disposed MSB. This Thom Mpinganjira is simply a cover up

  35. ?????? says:

    y is the sell of msb an issue wen inde bank was sold too???

    1. Analyst says:

      There were no toxic loans as much as is the case with MSB, you fool

    2. Helo says:

      because Indebank did not have toxic loans given to party thieves!

  36. Am glad that you all people follow what I post on my Wall How ever there is more into it
    that needs to be diluted. We are all aware in the sense that something is hidden in the whole MSB saga. Muli could be in a better position to tell Malawians if he was squeezed enough, how the money he borrowed was used to corrupt the Oaths, Media, Judiciary and MEC during the 20 May 2014 Polls.

    Muntharika is aware that perpetual threat of impeachment he may face if Malawians will discover the facts behind 20 may 2014 polls because it is morally justified by reaction Justice Mbendera and the former president Joyce Band prior to release of the results. His victory was justified solely on the basis that the court rushed to rule that MEC release the results without addressing the complaints and speculations made by other parties. Indeed
    as it was evident then, when political hunger tried to exact the justification of the process it was totally within the ambits of the law and it was court and MEC that favoured him to defend the whole process. The fact was that as a party, the DPP had no grace to rule at this time hence there is failure of governance in all angles. There is time bomb about to awaits in civil service, internal security, economy. There more DPP tries to defuse it the more it will expose them.

    A simple analogy is perhaps necessary to illustrate the point. A head of state is like a driver whom one employs to drive their car. That driver remains always an employee in driving the car, he must not behave as he pleases. He Must drive the car according to the strict instructions hat have been given to him. If he operates as he pleases, he is in breach of the rules, he must be fired

  37. NANA says:


    I SALUTE YOU !!!


  38. Joyce Chanthunya says:

    Amwene a Ntata, don’t play tricks with our intelligence here. You think we are all daft? If the brain behind all this shit was Bingu and you were his legal counsel, certainly, you must be the one who gave him the legal advice to fleece Malawians. You must be the one who even drafted all the illegal agreements. Therefore, the first one to be thrown behind bars should be yourself! Don’t play the “Pharisee Game” here. Malawi doesn’t need people like yourself. Hypocrite!…… Mfarisi, kagwere uko, usatibowe iwe ayi; Iya, tatopa ife! You are not the right person to say such things. What an insult to the intelligence of all Malawians! Kagwere uko, wamva?

  39. Kapasula Mayi Chiponda says:

    Bwebweta Ntata , utopa , mwana wa njoka iwe , nkhuku ya njiru . Wayambano sopano kunyoza ngakhale Bingu yemwe . Munthu wotembereredwa iwe , bench ikupha , palibe ntchito yako m’bomamu

  40. nthandalanda says:

    Simply put, this is a stupid government full of thieves. How can a bank that has posted a monthly profit of MK 2,5 billion be liquidated and sold? infact, these people have sold the bank at MK 6,8 billion not MK 9,3 billion. There is a conpirancy to sell the bank to themselves. Thomas Mpinganjira is just used as conduit. Where can he get all this money? Which investment that Thomas has made so far to prove to us that he is a billionaire? It is the same cashgate money that these people are using to buy our assets. BELIEVE ME, THEY WILL BUY MORE! How can an asset worthy Mk 46 billion be bought at Mk 6,8 billion only? In simple accounting basics, the bank started picking itself up as it posted a massive profit.

  41. Maximum Prison says:

    An article from a disgruntled man who claims to be a consultant but has nothing to offer! Shupiti. As Malawians what have we benefited from the existence of MSB country wide? How many local Malawians got loans from this bank? To some of us its better to sell it so that we should all have a playing ground when it comes to acquiring loans from the commercial banks other than from this MSB thing!

  42. ZZ Junior says:

    The writer has deliberately failed to mention roles played by Ian Bonongwe before and after Joseph Mwananvekha. Please always give us fair and unbiased articles or rather opinions.

  43. mwahana says:

    The whole deal smacks corruption of highest order. Even executors and buyer are one. Did you know that Lipunga, Uka and Mpinganjira were at one time coworkers working in one office at Deloitte????????

  44. Achimidzimidzi says:

    Thanks Mr.Ntata. Atleast I have followed how the laon was given.

  45. Nkhedu says:

    Tizavanso kuti Lake Malawi yagulisidwanso ife tili dyoo!!!

  46. Chinula Mvula says:

    Please Allan, get a real job you are better than that. Anger breeds frustration. Frustration breeds Anger. Anger hinders creativity. I am your secret admirer. Thanks.

  47. Charombanthu says:

    Well articulated and collaborated article. But the question is? Where were you Mr Ntata when Mwanamvekha was combining as ST and MSB CEO? Were you not part and parcel of that crew/system? We know that you were very close to the president Bingu then. What did you do about it? How convenient it is to come out now and say all these things when the bank has been sold. It can only mean one thing – you knew what was going on, you were part of the scheme and chose to keep quiet then because eventually you would be a beneficiary as well. That is how I see it…

  48. Bozwell Makaranga says:

    An ably documented and crystalised saga!

  49. Dr.prof.nyada says:

    Mm well said atl

  50. Mthawanji says:

    A failed state.we will cry forever unless and until there is a complete overhaul of our government system and people who govern us Malawi will not change.

  51. thinktankmalawi says:

    51 years of the right to choose billionaires at the back of the poor…another “who wants to be a billionaire ” contest is in 2019.They say the right things during campaign and acts strange when in power…

  52. Ntata be reasonable says:

    I thought the problems of MSB started way back in 2002. So what are you talking about here. I am of the view that you have to be objective in your analysis not parade yourself with all the hatred because you haven’t been given a position.

    I know that you failed to meet and convince APM to give you a position and that’s why you are here writing whatever comes into your empty grey matter. I know you are working with Bright Malopa as your informer-another frustrated individual who wanted to be appointed Chief Secretary.

    Govt cannot continue paying salaries for MSB employees. The bank needs to be independent and make profit and offer competitive salary packages. we don’t want politicians to continue abusing this bank….enough is enough. This is the only bank with the best ATM services available in Malawi at the moment. Its growth will be beneficial to its customers.

  53. kwalewera Zinyemba says:

    When will the leadership of the country assure the nation about recovery of the tax payers money still in the hands of individuals when the country continues to warrow in poverty. Hospitals have ni medicines and many other deficiencies of different kinds. Will Malawi come any cliser to the progress being registered in other countries? I cry for my country. God please save your children from the man made problems.

  54. Ntata be reasonable says:

    I thought the problems of MSB started way back in 2002. So waht are you talking about here. I am of the view that you have to be objective in your analysis not parade yourself with all the hatred because you haven’t been given a position.

    I know that you failed to meet and convince APM to give you a position and that’s why you are here writing whatever comes into your empty grey matter. I know you are working with Bright Malopa as your informer-another frustrated individual who wanted to be appointed Chief Secretary.

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