Court orders Standard Bank to produce cheque images to identify cashgate beneficiaries

Standard Bank of Malawi has been ordered by High Court to produce cheque images that show transactions carried on the accounts of companies owned by cashgate convict Oswald Lutepo between April and October 2013 identifying those that benefited from the infamous cashgate scandal.

The principal beneficiaries Lutepo, whose companies accounted for K4.2 billion (($7.5 million)of the total, was convicted on his own plea of guilty of conspiracy to defraud government of and money laundering.

A British-funded audit discovered evidence suggesting that fraudulent cheques were written out in big batches between April and September 2013.

Cashgate audit report conducted by British auditing firm Baker Tilly cheques were paid into at least ten different commercial banks throughout Malawi with the highest amount deposited in Standard Bank (49 %).  In comparison the lowest amount (1%) was deposited into OIBM.

The report says 22 cheques from 10 different businesses were banked at Standard Bank representing 49% of the ‘cashgate’ funds.

Analysis of the cheques deposited into Standard Bank shows the majority of this amount relates to two businesses being;  IPS and O&G Constructions  who  received  MK 1,860,584,273 and MK 1,140,738,209, respectively.

“These amounts total MK 3,001,322,562 which is 43.4% of the total ‘cashgate’ cheques. Both businesses are owned by Osward Lutepo,” reads the report in part.

The High Court judge Redson Kapindu sitting in Zomba registry on Monday has asked Standard Bank to make available the cheque images by September 2 and has also asked the defence team to make the cheque images available to the court by September 4 when sentencing will take place.

Defence lawyer Oswald Mtupila told the court that it was unfortunate that the cheque images the bank provided earlier did not show names of those who received money from the accounts of Lutepo’s Cashgate connected companies, Woget Industries Limited and International Procurement Services.

“The bank says its policy does not allow it to give account information to the third party, we really needed this information because it will vindicate my client as he was only used as a channel to siphon money from government coffers hence the ultimate beneficiaries would be known,” he said.

He also said he did not intend to dispute findings by an independent evaluator Amos Makalichi Chinkhadze of Lipindi Property Services who was hired by both the state and defence to re-evaluate Woget Industries which Lutepo restituted.

The assessor has since found that the company is worth K370 million ($658 363).

The property was a subject of controversy following huge discrepancies that followed as earlier the State found that it was worth K293 million ($521 352.31) while the defence said it was worthy K1.427 billion ($2.5 million).

The ‘Cashgate’ involved a systematic plunder that involved public officers conniving with private sector firms and  individuals.

The scandal led donors to suspend about $150m in budget support and aid to the Southern African nation. Malawi’s International Monetary Fund program also went off track because of the scandal.