Plans by government to sell a controlling stake in state-owned Malawi Savings Bank (MSB) faces potential blow from lawmakers who want to block the move.
The Public Private Partnerships Commission (PPPC) requested strategic investors to buy a controlling stake in MSB in which the government owns 100 percent of its shares.
PPPC did not disclose the sizes of the stakes that are up for sale or how much it was selling them for.
But the government’s divestiture agency said the sale of the stake will help strengthen the financial and operational capabilities of the commercial bank “in a competitive environment.”
However, Member of Parliament for Lilongwe South Peter Dimba has issued a private notice to the National Assembly to question Minister of Finance Goodall Gondwe about the sale of the bank.
Dimba wants Gondwe to explain why government is not recapitalising the bank through public listing (IPO) on the stock exchange so that Malawians are given a chance to own the institution.
The notice further indicates that Dimba wants Gondwe to explain why government intends to sell the bank “on the pretext that it cannot run such a business and yet it wants to start another bank”.
“Why not just restructure MSB to take care of the investment aspect; how do you close a tomato business to start another tomato business? What will happen to the 600 plus employees MSB currently has should the sale materialise,” wondered Dimba.
According to the Reserve Bank of Malawi , the MSB is weighed down by bad loans and it requires a $48.3 million (MWK 23.7 billion) in capital and liquidity by June to satisfy Basel II financial and regulatory requirements or risk being struck off by the central bank..
Malawi Congress Party (MCP) spokeswoman De Jessie Kabwila is faulting government of deliberately failing to intervene in helping the bank to recover millions of kwacha lost to bad loans.
“The privatisation of government assets is meant to benefit a majority of Malawians through shareholding and not just few greedy individuals connected to government,” she said as quoted by Weekend Nation.
Meanwhile, High Court ordered Mulli Brothers Limited (MBL) to repay MSB a K3.2 billion loan, which was obtained as an overdraft about four years ago but was turned into a medium-term loan.
The company had committed to repay the loan over a period of 60 months in equal monthly instalments of K82,131,869.43.
Mulli appealed to Supreme Court to extend the Stay Order they obtained stopping execution of the High Court ruling to pave way for an appeal against the figure.
MBL engaged Johnson and Wilson private auditors and accountants to conduct a forensic audit of its bank accounts in regards to the case.Follow and Subscribe Nyasa TV :