Court set aside Mphwiyo’s K2.4bn payout

Malawi Industrial Relations Court has set aside its own default judgment that was recently pronounced, ordering the Government to pay cashgate suspect and former Budget Director Paul Mphwiyo the full sum of all his dues for the period he has been on interdiction.

Mphwiyo, who is accused of being a mastermind of gross pilfering of state resources through the infamous money heist dubbed ‘Cashgate’ has had sued government for unlawfully putting him on interdiction without pay, removing him on payroll and withholding of his benefits among other others.

The matter came to light soon after former Attorney General (AG) Chikosa Silungwe advised government in August of 2020 that interdiction of public officers without pay is illegal and tantamount to unfair labour practices.

Thabo Chakaka Nyirenda: Asked the court to set aside the order to pay Mphwiyo K2.4 billion.

At that moment, the Government did not object to the claim neither did it challenge the demands.

However, when President Chakwera appointed a new Attorney Attorney, Thabo Chakaka Nyirenda, the new government chief legal advisor took a different direction and departed from his predecessor’s legal opinion.

When took over the case and examined it he applied before the court to set aside the default judgment arguing that the State has a counter-claim for the sum of K2.4 billion, which is related to the criminal charges levelled against the former government purse keeper, Mphwiyo.

In his ruling, delivered on Monday, November 8, IRC Deputy Chairperson Howard Pemba said the state successfully argued that there is a defense on merits and has to be tested at trial.

In his determination, Pemba ruled that the State should be allowed to formally file their defense and serve it to Mphwiyo within 14 days and the matter should be set down for pre-hearing.

Mphwiyo’s suspension came after he was arrested over the theft of K2.4 billion in government funds, in the Cashgate scandal.

Over the past seven years, Mphwiyo has been answering Cashgate related charges.

Legally, Mphwiyo is still a civil servant but was struck off the payroll and government has not been giving him the due benefits.

After he raised the matter to the court, the Industrial Relations Court ordered the Government to pay him all his dues as accrued over the period he has been on suspension, the Attorney General Thabo Chakaka Nyirenda contested the order.

Mphwiyo was interdicted on November 5, 2014 following his arrest in relation to a K2.4 billion corruption case.

Following an application by his lawyers, the court has ordered the government to calculate and pay him all his salary as accrued over the past seven years he has been on suspension.

“The Accountant General and the Secretary for Human Resource Management and Development forthwith calculate and pay all the Applicant’s withheld salary from 5th November, 2014 being the date of interdiction to date when the payment is actually made,” reads the Industrial Relations Court judgement dated 1st September 2021.

The court has further ordered that the withheld salary to be paid should take into account all the increments effected in the years that Mphwiyo was on interdiction without pay.

Furthermore, the court also lifted Mphwiyo’s interdiction and determined that the former Budget Director be paid his salary and all accompanying benefits.

“The court has ordered Human Resources Management and Development should forthwith reinstate the applicant on government pay roll. The interdiction of the Applicant without pay is unlawful, illegal and amounts to unfair labour practice,” ruled industrial Court in its 1st September 2021 judgement.

Mphwiyo’s lost benefits in the period that he has been on suspension include among other things, a provision of a car with option to buy, fuel allowance of 250 liters per month and airtime allowance of K20,000 per month.

However, the government chief legal Counsel, Thabo Chakaka Nyirenda obtained a stay order to put aside the default judgement.

“Accordingly, I hereby pray to this honourable court that an order be made setting aside the default judgment herein and that the Respondent be at liberty to file and serve defence,” reads part of Attorney General Thabo Chakaka Nyirenda’s sworn affidavit.

The contention over interdiction without pay came to the fore early this year amid government’s crackdown over the suspected abuse of K6.2 billion.

In a memo dated February 4, 2020 and copied to the Accountant General, the former chief government legal advisor had said “regardless of the circumstances that led to the interdiction of the officers, interdiction without pay is illegal”.

In 2014, government interdicted Mphwiyo following his arrest for being suspected to have played a part in the 2013 cashgate scandal at Capital Hill in which billions of kwacha were looted.

On September 13, 2013, Mphwiyo was shot three times by unknown thugs at his Area 43 residence in Lilongwe and was flown to South Africa for surgical treatment.

His shooting opened a pandora’s box and wave of revelations in relation to the plundering of taxpayer’s money at the seat of government, the Capitol Hill with some civil servants being caught with cash stashed in car boots and homes.

Mphwiyo is currently on bail in his money laundering case and the case is still going on after the judge who was hearing the case retired and sent to a foreign mission in the US as a diplomat.

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