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.
- The Centre for Investigative Journalism Malawi (CIJM) – investigative-malawi.com – supported this story.
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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 involved in criminal activity. At the same time investigate who these criminals are, and how did they manage to remain in the country? The easiest way is to find out from day one of their arrival in Malawi to the day of their arrest and allegations of crime. It’s not a rocket science to get This done. If I was running the show in Malawi I would clean the corruption within no time. I would also like to appeal to the Malawian not to take the law into their own hands to attack the minority’s, as not all of these people are criminals. In recent days there have been many attacks and some of the injuries are brutal and life threatening and must cease immediately. My land of Malawi is ridden with corruption… from bottom right to the top. Malawian govt must DEPORT anybodyfound guilty of causing financial damage to the nation. We need honesty and patriot ppl to fight corrupt govt officials. May god bless you all and bless my warm heart of Africa. I rest my case!
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.
They didn’t give Peter Mutharika a share?
They were stupid. They did not give part of their loot to DPP via Peter Muthalika.
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 the reception personally but no action was taken i then realised that the businessman is well conected with powerful politicians and always side with the goverment of the day since the days of UDF, DPP, PP and now DPP.He is one of the very richest businessmen in malawi and he has multiple companies e.g. production, hardwares and wholesalers of fam imputs. This guy bought a sit next to the president twice during the late bingu wamuthalika at fundraising functions (i think the sit was wealth 10 million kwacha then).
I tried to help my beloved country because thats the only place i call home but i was sad to learn that my fellow guffey and gridy malawians are also involved with these thieves. After i learned that this try of mine wont yield any positive results i left my job. I am not going to mention names but what you should know is that this shit is real and that almost half of these foreigners especially those of asian origin are doing it no wonder most of them are so rich than the type of business they do.
This whole process start with MRA officers who do physical examinations of imported goods, they are given there share, then the bank employees who handle import documents, they are also given there share but all this our beloved nation is victimised badly all in the name of making money.
Our exchange control policys are too weak no wonder there are too many players involved in this malpractices of externalization.corruption is killing my country and those in authority have no clue on the impact of these acts on their future generations.
Its nothing but the truth. Sad and shame
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
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
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.
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.
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 these people are not even ashamed to fleece it away. Lock them up not ever be seen again….that will teach the rest of them a big lesson. For once DPP, do the right thing otherwise UTM will wipe you out.
Collins umatha to dig deep. Expose more of these Indian crooks who come here to steal money in the pretext of investment. Look at their infrastructure in Lilongwe. It is miserable. There are very few genuine Indians with passion for development of a nation. We need to be very tough on these corrupt crooks.
If investigations can be made thoroughly, it will also be discovered that some of them do not do any reasonable business that can bring them that income. Some of this money comes from corrupt transactions or inflated pricing and is tax payers money. Try to look at their books.
Malawians are given a small sweet in these offices to sign documents leaving huge sums of money evaporation. This is killing our economy. Let us be serious in this countyr and build it. I love Malawi, do you? Let us deal with such weak Malawians and the companies involved in such malpractices.
If Police search the houses of these Pakistanis they will find that they have all got Malawi Passports. And where did they get such huge sums of money running those small shops? These are crooks smuggling drugs and evading duties. ALL Indians and Pakistanis in Malawi hold Malawi Passports but retain their Indian, Pakistani and UK Passports. Crooks bleeding Malawi and making Malawians poor.
Nothing is going to happen to these Asians.
its business as usual.
Make noise in the newspapers, radio and get one minute of fame then case never even takes off.
Cry my beloved Malawi.
Now you know why Idi Amin did what he did.