AG rejects Jumbe’s K584m demand from Malawi govt: ‘No contract on bank job’

Attorney General Kalekeni Kaphale has rejected a claim from former minister of Finance Friday Jumbe of about K584 million as compensation for ‘unfair dismissal’ from the yet-to-be-established Malawi Development Bank.

Jumbe was fired from the post of chief executive officer (CEO) at the bank and is seeking damages for ‘unfair dismissal’.

Finance Minister Goodall Gondwe said last Friday in parliament that Malawi has put on hold plans to establish the Development Bank.

Gondwe said some development partners advised government to establish a development fund “since this would part own development projects and be involved in their management”

Jumbe – who contested in the last presidential election under the New Labour Party but later “dissolved” the party to support the ruling Democratic Progressive Party (DPP) – had already been paid K14 million for two and half months as CEO.

He is now claiming K584 million in damages for terminating his job, according to a letter dated April 10, 2015 by a private practice lawyer Joseph Kamkwasi to Attorney General.

The letter says Jumbe had been given a five-year contract to head the bank.

But Attorney General Kaphale said there was no formal written contract between Jumbe and government on the bank job.

Kaphale asked Jumbe to send him the “so-called contract” and further also “address whether the registrar of financial institutions [the governor of the Reserve Bank of Malawi] had vetted your client as a fit and proper person to manage the bank better as per Financial Services Act and the direct on fit and proper person.”

Kamkwasi in his response letter said: “It is the duty of the employer to follow through the provision of Section 27 of the Employment Act. It is unconscionable for the employer who has violated Section 27 of the Employment Act to run away from responsibility and contractual on the basis there is no written contract. It is the duty of the employer to follow the provision of the Financial Services Act and direct of fitness and proper person our client is yet to be advised.<

“Our client knows he has a contract with Malawi Government. He was paid K11 710 360.46 for working for your client in the first two and half months.”

On the K14 million Jumbe was paid, Kaphale said the money was  for“ some job” done.

Finance Minister Gondwe told parliament that the formation of the development bank “has been delayed” in order to give “full room” to the consultative process, saying parliament will be duly informed about the progress.

Government sees the development bank as a tool to help medium and large-scale entrepreneurs to access capital as it is problematic for them to get loans from commercial banks.

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