4  Asians risk lengthy jail in forex externalisation case involving K5bn

Four Mzuzu based businesspersons of Asian origin are facing the prospects of life imprisonment sentences, MK500m fines and the revocation of their business licences if the High Court in Mzuzu convicts them for the alleged cases of money laundering, forgery and breach of the exchange control regulations.

The Reserve Bank of Malawi through its legal counsel Thabo Chakaka Nyirenda is prosecuting the case and in an interview this week Nyirendasaid: “There is too much illegal externalization of foreign currency in Malawi. Billions of dollars have been lost”

Between January and July 2017 and in eight separate transactions processed at NEDBANK Mzuzu Branch, the quartet – Junaid Muhammad Ibrahim, Shehza Abdul Aziz Muhammad, KashifIqbar and Muhammad Zubair Khan – obtained foreign currency amounting to approximately USD 6 million (MK5 billion) on the pretext that they would import Salt making machines and Tan Salt.

Wesly Mwafulirwa of Kawelo Lawyers, who is representing the four, glorified his clients.

“They are honest, innocent, doing business in an honest manner and above all they are good people,” Mwafulirwa said in a telephone interview.

Under criminal case number 734 of 2017, Director of Public Prosecutions Mary Kachale nodded to RBM to go ahead with the prosecution of the four.

“It is hereby certified in exercise of the powers conferred by section 289 of the Criminal Procedure and Evidence Code that the case is a proper one for trial by the High Court as a summary procedure case,” Kachale said.

Weak controls over Malawi’s banking system and delays in prosecuting cases when money-laundering has been discovered are allowing foreign companies, including some Indian ones, to take millions of dollars out of the country illegally and with impunity, according to court documents and interviews with experts and officials.

In the capture of banking system and financial institutions, it has been discovered that between January and November 2017, the Finance Intelligence Authority (FIA) uncovered 63 unsupported forex transactions worth US$7.4 million (approximately K5.4 billion), remitted without imports being returned into Malawi, according to information from the Reserve Bank of Malawi (RBM) and the FIA itself.

Broadly, the offences involve the making and use of false documents and deceptions by persons applying for permission to remit large sums of foreign currency abroad.

In one instance, between January and July 2017 at NEDBANK, Mzuzu Branchin the city of Mzuzu using account numbers – 011990004554, 061000012717, and 061000012962 obtained US$2,192,292.50 but no imports were made.

Both Reserve Bank of Malawi and the Finance Intelligence Authority have evidence that huge sums of illicit funds are possibly being laundered using the Malawian banking system under the disguise of import payments being made by what appears to be legitimate businesses.

“All cases to do with illegal externalization are done by Pakistani nationals. My suspicions are that they sponsor terrorism,” Nyirenda said.

And in unresolved cases at the Malawi High Court dating back to 2014, 13 Indian owned companies allegedly externalized $4 million in eight separate transactions. Indian companies have long played an important role in Malawi’s business world and now control about 60 percent of the economy through various companies ranging from manufacturing to banks and hotels.

The cases against the 13 Indian companies are known because they have been brought to court by the RBM and FIA.

The companies and individuals are: AMAD, M R – Intertrade Agency and Mozimpex, USMAN, S and BILAL, S – Hasbro Ltd and Verizon, ARIF, M – Noor General Distributors and TS Distributors, RAZZAQ/RAZAQ, M and MANJARA, A S I – ZamZam Import &Export, GANI, S G and RAZA, N – Premium Commodity Traders Fawa Products; Tarar Enterprises Hong Kong: Vic Charm Ltd, RAWANI, S S [FRS Co Ltd; BT Trading Co; Al Johara; Nantong JunloveInt; HK Polymers], Musa KariamIbrahiam of Zambezia Traders, KaramatUllahChaudhry and Naeen M. Iqbal.

For instance, Mahomed Rafiq Amad Managing Director of Intertrade Agency faces nine counts involving the externalization of a total of US$2,058,000.

They have pleaded not guilty, according to court documents seen by Nyasa Times.

Contacted by phone for comment, they declined to comment, saying they matter is being handled by the court system.

Under count one, Amad is alleged to have used a Customs Declaration Form Number C80 of 31/08/13 of Chiponde Border valued at US$768,000.00, in support of an application made to CDH Investment Bank for remittance of the said sum of VIC CHARM LIMITED of Hong Kong, purportedly to pre-clear 4,500 Metric Tonnes imported Cotton seed, when in actual fact no such importation was ever made, thereby fraudulently externalization the said US$768,000.00 from Malawi.

It is also alleged that on or about the 2nd day of September 2013 at CDH Investment Bank in the City of Blantyre, Amad was in possession of US$720,000.00, which he knew, or had reason to believe represented, in whole or in part, directly or indirectly, the proceeds of illegally obtained foreign currency.

It is also alleged that on or about the 7th day of October, 2010 at CDH Investment Bank in the City of Blantyre using Account Number 0020135092200 and Account Name Intertrade Agency obtained foreign currency amounting to US$570,000.00 for the purpose of payment of goods imported, namely, cotton seeds from Mozimpex of Mozambique, when in fact no such goods were imported.

Similarly, two other Indians, Karamat Ullah Chaudhry and Lakhu Mohamed Naeem M Iqbal face 13 counts ranging from forgery of official documents, making a false document without authority, uttering a false document to illegally obtaining foreign currency.

They could not be reached for comment, but have pleaded not guilty. Court documents allege that the duo on five separate occasions externalized a total of $1.6 million.

 

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Legend
Guest

I as an Malawi Asian living in the West for nearly 4 decades shocked and horrified, when I read this kind of stories. I left my country of birth without a single tambala in my pocket, however I have everything now a person could ask for. I worked very hard days and night to reach to this position. I did not rob any person or nation, for which I’m proud of. As I have mentioned before, those foreign national who were given the rights to remain in Malawi must be sent back to their country of origin…. if they are… Read more »

Concerned citizen
Guest

These crooks with some very greedy non-patriotic leaders are selling our beautiful land as this article shows to no benefit of the nation, but their own pocket.

QueenB
Guest
QueenB

They didn’t give Peter Mutharika a share?

Dipipi wa Yudiefu
Guest
Dipipi wa Yudiefu

They were stupid. They did not give part of their loot to DPP via Peter Muthalika.

365 watch 24/7
Guest
365 watch 24/7

It makes me sad and angry at the same time to hear such practices are continuing in my country without solutions being made I for one have seen a certain person working at international trade division of a well known commercial bank being offered a saloon car once he helped a businessman of indian origin to swap original import invoices with doctored one wealth millions of dollars and this happened more than three times on my presence. I tried to report to exchange control devision of the reserve bank of malawi with well documented files and presented the same at… Read more »

Sure
Guest
Sure

Amangidwe basi they want to destroy only country, Arrest them thats criminal offence. Kodi malawi yaphweka tsopano yeti ? Ma Nigerians ndi amwenye… judges you are to blame…. tili ndi ma lawyer wosatha ntchiro akungoluza milandu ya boma,mbizi za corrupt ion too

Moya
Guest
Moya

This is case is going no where as the poor RBM lawyer is busy trying to prosecute these criminals the big bwanas they have already approached these Asians and pocketed the cash so that they are protected. Soon he will be told kuti zitaye or he will be sent ku training abroad. Malawi sazatheka until mentality changes, starting with leadership

mtete
Guest

I would believe the prospect of life imprisonment and heavy fines if it were a government other than DPP, UDF or PP. As it is, it’s possible some people have already been palm greased.

Wiki leak
Guest
Wiki leak

Are you surprised? 80% of business contracts in government and private sector goes to these asians and 70% of the money is externised with the help of senior government and party officials, including reserve. and commercial banks. No where in Africa this thing of letting asians get a big chunk of business. Even these Nigerians, Rwandese and Burundi’s are busy externising. How many of them are investing in Malawi despite making billions of kwachas. The money they making here is bieng invested in there countries, and do you think they Malawi kwacha to their countries? A sick country called Malawi.

#DzukaniAmalawi
Guest
#DzukaniAmalawi

Watch the space….none of these culprits will be successfully prosecuted and they will continue externalising forex with impunity. This how “serious” DPP-led government is with crime. Money laundering is a serious crime by all standards and needs to be treated as such. It is this relaxed attitude by our head of state and justice system that has now put Malawi on the world map as crime paradise. I wouldn’t be surprised if in 5 years time 50% of the population is made of foreign criminals preying their trade outside Police stations. Malawi has a mare reserve of forex and yet… Read more »

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