Court defers Mulli’s stay order: Fights MSB over K3.2 bln loan

The Supreme Court of Appeal on Monday deferred to a later date the application by Mulli Brothers Limited (MBL) to extend the stay order  the conglomerate obtained against the High Court’s (Commercial Division) ruling to repay government-owned Malawi Savings Bank (MSB) a K3.2 billion loan.

Judge Michael Mtambo had ordered Mulli  to repay the loan, accumulated to K3.2 billion, 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.

Mtambo made the ruling after he refused to recuse himself from the  case on allegations that he received a bribe from the bank.

On Monday Supreme Court of Appeal Judge, Justice Robert Chinangwa said would communicate later on his ruling on the application by MBL’s lawyer, Chancy Gondwe of Chancy & Associates to extend the Stay Order they obtained stopping execution of the lower court’s ruling to pave way for an appeal against the figure.

Gondwe, said the High Court ruling ignored the consideration that his client paid some money which could have drastically reduced the amount.

He argued that the lower court failed to consider a K600 million payment MBL made as part of the loan repayment.

“Our client is not happy with the Commercial Court’s ruling; we find the figure exaggerated. We don’t understand how the court arrived at that figure. And there are some payments our client made to the bank of which the lower court did not consider in its judgement,” argued Gondwe.

“The defendant’s witness, George Sibale, told the court, and it is on record, that the plaintiff [MBL Holdings] paid slightly over K600 million and this is a fact that was never disputed, but rather admitted. The honourable court could have considered the same in its judgement.”

MSB claims that MBL Holdings took a K3.2 billion (about $7m) overdraft and is fighting repayment of the loan.Mulli, however, accuse the bank of unfair treatment and that the amount is exaggerated.

Last year MBL engaged Johnson and Wilson private auditors and accountants to conduct a forensic audit of its bank accounts in regards to the case.

MBL Holdings has obtained a stay order against execution of the judgement until the determination of the matter by the Supreme Court.