some sections of the civil society have called for “total cancellation” of the state-owned Malawi Savings Bank (MSB) and that government should inject resources into the financial institution.
The call was made by human rights activist Billy Mayaya and Forum for National Development (FND) leader Fyson Chodzi when the two addressed reporters in Lilongwe on Saturday.
President Peter Mutharika last week suspended the sale of MSB, pending review in response to numerous calls for a thorough examination of the controversial sale.
But Mayaya, who recently led demonstrations against the sale of the bank, said the President should ensure the sale is cancelled in totality and not just temporary stop just to hoodwink Malawians in a bid to have a smooth budget session of parliament.
“Government should initiate audit of the entire dubious process of the sale through the Initiative a Public Offering and the listing of the Malawi Stock exchange. This should include a probe to the individual and institutions involved, these include a Reserve a Bank and Public Private Partnership Commission,” said Mayaya.
“The President should completely cancel the sale and not suspend,” he added/
The CSOs have demanded transfer of the Bank’s current Chief Executive Officer(CEO) Ian Bonongwe and dissolve the entire board which, according to them, was appointed by the recommendations of the current CEOs based on partisan politics.
Fyson Chodzi, of Forum for National Development said the sale of MSB smacks of “dark corner deals.”
MSB – which currently is in a financial mess – is being sold to only preferred bidder FDH Bank of Thom Mpinganjira.
The deal saw FDH offering K4.9 billion to buy the bank but government authorities argued that it was on the lower side considering that MSB is a big bank with a lot of assets.
Meanwhile, economic experts has argued that Mutharika’s decision to suspend the MSB deal will greatly affect operations of the bank as some serious and big customers will continue to be on a wait and see due to uncertainty surrounding the future of the financial institution.
Economics Professor at Chancellor College Ben Kalua is of the view that suspending the sale of the bank will have adverse economic impact in that already reports indicate that some customers are deserting the bank by closing their accounts in fear of unknown future.
“The bank operates on confidence of customers and once you put customers in suspense without a certain position known about the future then customers are bound to decide to pull out their resources up until the institution comes back to normalcy of operations”, said Kalua.
Mutharika restated that it is imperative for his Government disposes its interest in MSB for the good of the national economy, arguing that the decision on the sale is supported by the Institute of Chartered Accountants in Malawi (ICAM); the private sector; the Regulator of Banks and Financial Services as well as the donor community including the IMF, among others.
MSB chief executive officer, Ian Bonongwe, has since said although the recapitalisation process of the bank could eventually lead to a possible change of the shareholding and ownership structure of the bank, it is not about change of business of the bank.
He, however, pleaded for a quick conclusion to the matter so that the board and management of the bank should strategise on how best to position it depending on how the recapitalisation process is concluded.Follow and Subscribe Nyasa TV :