DPP calls for Reserve Bank probe over Malawi cash-gate role: ‘Fish rot from head down’

The opposition Democratic Progressive Party (DPP) has called on the probe into the Reserve Bank of Malawi (RBM) for its role to the plunder of public funds at Capital Hill through payments without delivering services.

Leader of DPP in the House George Chaponda was responding to a report presented in Parliament on Monday by Vice President Khumbo Kachali who blamed the looting of government coffers on “loopholes” in the state’s payment system and vowed to punish culprits.

In is response, Chaponda who started with a phrase “a fish rot from head down” which was repeated throughout in his speech,claimed the looting is a cartel for the ruling People’s Party that seeks to raise money for 2014 campaign period.

He called for a probe of the central bank in the cash-gate role.

Chaponda: Fish rots from head to bottom
Chaponda: Fish rots from head to bottom

“Mr. Speaker Sir, public funds are managed under Account Number 1 which is at the Reserve Bank of Malawi (RBM). Now, we wonder why little or no mention is made of the role of the banks in this filthy act,” said Chaponda.

“We also wish to question how it is that the Reserve Bank Governor could have had absolutely no knowledge of all this. Is it possible that the RBM Governor too has been caught up in the cobweb of political instructions to safeguard and promote this deplorable theft? Allow me Mr. Speaker to strongly recommend that the RBM should also be investigated. We are talking about a network, which may include some financial intermediaries that should be identified and subjected to intensive investigation,” said Chaponda.

The DPP parliamentary leader added: “The cheques used in this scam are normally deposited or cashed in commercial banks. The RBM and the commercial banks which might have handled the suspect transactions should make public statements on how these transactions were processed. Mr. Speaker Sir, we are all aware of the rigorous process that banks subject their customers to when they are cashing cheques. Here, Mr. Speaker Sir, we are talking about cheques as small as K40, 000.00 what more with cheques worth millions and billions that have passed through the banks under this fraudulent scheme. Why the lack of scrutiny this time?”

The opposition’s political parties asked the government to extend the arrest to controlling officers who signed and authorized the cheques rather than only arresting junior officers as is the case now.

Two weeks ago, President Joyce Banda told the nation that the problems leading to the recent revelations started years ago at the introduction of the government computer accounting system, the Integrated Financial Management Information System (Ifmis).

Kachali in his report submitted to Parliament said “loopholes” in the state’s payment system have seen public servants “siphoning huge sums of money using private companies with no contracts with government”.

A forensic audit into fraud and corruption which is underway will date back to 2006, when the late president Bingu wa Mutharika was in his first term, he said.

A “number of firms who were beneficiaries of fraud and corruption have had their bank accounts frozen”, Kachali added.

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