Cotton Ginners Limited swindle Malawi banks K17 billion

Cotton Ginners Limited (CGL) has swindled Malawian banks of $20 million (approximately K17 billion) in loans and its Chief Executive Officer Abdul Yasin Reiman is reported to have fled the country to Pakistan.

Insiders confided in Nyasa Times that Reiman got various US dollar dominated loans from various banks in the country including a government supported lending arm, the Export Development Fund (EDF), which is supposed to support Malawian business people in accessing loans for export business.

Ironically, after getting the loans from the bank, CGL offices in Limbe were gutted by fire about a week ago which insiders believe is meant to destroy some evidence connected to the loans.

We can reveal that the government entity, Export Development Fund loaned CGL a whooping $5 million (approx K3.7 billion) while Standard Bank Malawi, Ecobank Malawi each loaned the cotton company $5 million each.

CDH Bank parted with $3 million while National Bank of Malawi loaned out the least amount of $1 million.

“All this money is gone, Reiman fled the country and the banks are wondering how they can recover this money, it’s a lot of money to be lost by these major banks at once,” said the source.

Insiders said the banks and EDF have just realized that the companies abroad which were supposed to buy the cotton from CGL already paid for the cotton to CGL but the money was diverted, probably to Pakistani where Reiman is said to have fled to.

Chairman of CGL Farook Ibrahim is said to have feigned ignorance of the loans as this was being done by Abdul Reiman on his own.

However, we can reveal that Ibrahim was well aware of the scam after Reiman sent a whatsapp messages to the Indian community in Blantyre where he revealed that Ibrahim was aware of the loans.

“Of course Ibrahim was aware of these transactions, one cannot get all these kind of loans without the blessing of the board let alone the Chairman of the board, he knows what is happening probably he knows where the money is,” said an insider privy to the investigation by the banks.

Representatives of the affected banks and EDF met two weeks ago in Blantyre to discuss of a common approach to recover the money or the next course of action.

Insiders say the banks are yet to come up with a concrete strategy of recovering the money.