Attorney General Kalekeni Kaphale has clarified that the payments government made to Rummage Pace topping the ‘cashgate’ external forensic audit report were dully cleared by his office and were included in the report on suspicion that they overcharged.
In the Baker Tilly report appendix, Rummage Pace (owned by Anil Lawlani/Raju Ralwani) reportedly were paid K12, 205,540,498, representing 50.2 percent of the loss on suspected overpayment.
The company offered services to the Malawi Defence Force and the Malawi Police Service.
Apart from above mentioned supplies. there was one separate deal, Rummage had supplied to Xelite and then Xelite further supplied to government. One of the managers confirmed that there was one transaction , saying they have proper documentation on their supplies from Attorney General’s office and Ministry of Finance.
Xelite said they were “surprised” with the report, saying they were not interviewed by Baker Tilly as they would have presented their documents of the supplies.
But Attorney General told Malawi News on Saturday that the two companies were not accused of ‘cashgate – obtaining payments from government on services not supplied or rendered – but it’s a suspected case of overcharging.
“My reading of the report, which I have done several times shows that the main issue in the transactions involving the two companies was over pricing,” said Kaphale.
“Prices are agreed by two parties,” he adds.
The Attorney General pointed out those documents in his possession show that the payments were approved by his officer, certainly by his predecessor.
“Government normally does not buy from the source. It buys from middlemen. Middlemen usually quote their prices higher, “said Kaphale as quoted by Malawi News.
Nyasa Times understands that the supplies to the MDF and Police were done as a matter of exigency.
Attorney General said Rummage Pace matter is “outside the modus operandi of cashgate.”
He said: “When you look at the report, you have people who didn’t supply anything, yet they got payment.”
The report further cites that chief cashgate suspect Oswald Lutepo is linked to at least 16 different businesses in Malawi including IPS which he registered on 12 July 2005 and O&G Construction Limited which was incorporated on 13 August 2010.
“Based on the evidence provided these are the only two businesses he owns that received ‘cashgate’ cheques. Transfers were however made from these two businesses to at least two other businesses that Osward Lutepo is linked to or owns being Chloride Batteries Limited and Woget Cotton Ginning Company.
IPS and O&G Construction received a total of MK 4,428,316,582 via 17 cheque payments from the Malawi government without supplying any goods, services or works in return, according to the report.
Some of the companies named on this appendix are Hurry Civil Engineering Construction (registered by Laura Savala), Pawooh Logistics (registered by Limumba Karim), Mahembe Civil Engineering (registered by Philbert Mkandawire), Image Investments (registered by Stafford Mpoola) and WEK Construction (registered by William Kachingwe).
The cashgate scam prompted foreign donors, who provide around 40 percent of Malawi’s budget, to pull the plug on aid of around $150 million last year.
It is the biggest financial scandal in Malawi’s history, and helped push former president Joyce Banda out of power in May elections, which were won by Peter Mutharika.
A number of government officials implicated in the fraud are facing criminal charges, and a first official was jailed last month for three years over the scandal.Follow and Subscribe Nyasa TV :