The High Court in Mzuzu is yet to set a date for a hearing of case in which four Mzuzu based businesspersons of Asian origin are answering charges of money laundering, forgery and breach of the exchange control regulations.
The quartet – Junaid Muhammad Ibrahim, Shehza Abdul Aziz Muhammad, KashifIqbar and Muhammad Zubair Khan – obtained foreign currency amounting to approximately USD 6 million (MK5 billion) on the pretext that they would import Salt making machines and Tan Salt.
Malawi’s eight state agencies have evidence that huge sums of illicit funds are possibly being laundered using the Malawian banking system under the disguise of import payments being made by what appears to be legitimate businesses.
The agencies are: the Malawi Police Service, Office of the Director of Public Prosecutions (DPP), the Anti-Corruption Bureau (ACB), Malawi Revenue Authority (MRA), Immigration Department, National Intelligence Service (NIS), Financial Intelligence Authority (FIA) and the Reserve Bank of Malawi (RBM).
In the capture of banking system and financial institutions, it has been discovered that between January and November 2017, the Finance Intelligence Authority (FIA) uncovered 63 unsupported forex transactions worth US$7.4 million (approximately K5.4 billion), remitted without imports being returned into Malawi.
Cause lists at the Court do not show a set date, almost a year after their arraignment.
“The case is just waiting for a date for hearing. Any day we may go to Court,” said Wesly Mwafulirwa of Kawelo Lawyers, who is representing the quartet.
Weak controls over Malawi’s banking system and delays in prosecuting cases when money-laundering has been discovered are allowing foreign companies, including some Indian ones, to take millions of dollars out of the country illegally and with impunity, according to court documents and interviews with experts and officials.
Broadly, the offences involve the making and use of false documents and deceptions by persons applying for permission to remit large sums of foreign currency abroad.
And in unresolved cases at the Malawi High Court dating back to 2014, 13 Indian owned companies allegedly externalized $4 million in eight separate transactions. Indian companies have long played an important role in Malawi’s business world and now control about 60 percent of the economy through various companies ranging from manufacturing to banks and hotels.
This week the Reserve Bank of Malawi estimates that for the past three years, Malawi lost $395 million (MK240 billion) due to various financial crimes chief among them being the illegal externalisation of foreign currency and transfer mispricing by several multinational companies operating in Malawi.
The amount is almost equivalent to what Malawi earns from tobacco, the country’s major foreign exchange earner. It is also about 17 percent of Malawi’s K1.4 trillion 2018/19 National Budget.
“The government is doing all it can to stop this but criminals have their own ways of beating the system. That was the problem in the past,” RBM Governor Dalitso Kabambe said.
- The Centre for Investigative Journalism Malawi (CIJM) – www. investigative-malawi.com
– supported this story.