EDF senior manages risk probe over Handsome M’bwana’s hiring as auditor: Concerned staff members report management to ACB over probable corruption and office abuse

Directors of the Board for the Export Development Fund (EDF) risk facing a probe by the Anti-Corruption Bureau (ACB) following the decision by concerned members of staff at the Fund to report their bosses to the graft busting body over suspected corruption and abuse of office.

The concerned members of staff have written ACB Director General, Martha Chizuma, asking her graft-busting body to institute investigations into probable corruption and abuse of office by senior managers at the subsidiary of the Central Bank.

The letter, which is in our possession is title: REPORTING CORRUPT PRACTICES AND ABUSE OF OFFICE BY THE BOARD CHAIRMAN, CHIEF EXECUTIVE OFFICER, COMPANY SECRETARY AND A MEMBER OF THE BOARD OF DIRECTORS OF EXPORT DEVELOPMENT FUND (EDF), A WHOLLY OWNED SUBSIDIARY OF THE RESERVE BANK OF MALAWI (RBM).

It has been copied to the Secretary to the President and Cabinet, Zanga-Zanga Chikhosi, Chairperson of the Public Accounts Committee of Parliament (PAC), Shadreck Namalomba and Secretary to the Treasury Dr MacDonald Mwale.

ACB Director General Martha Chizuma – Must act now.

The concerned members of staff want ACB to investigate corruption and gross abuse of office by EDF Board Chairman, Neil Nyirongo, Chief Executive Officer Gerald Nsomba, the Company Secretary Agnes Sentala and Tim De Borde, who is a member of the Board of Directors of EDF.

They allege that between September 2021 and December 2021, the three members of the Board and the Chief Executive Officer (CEO) handpicked Handsome M’bwana, styled as Fletcher and Evance, who is not registered as an Audit Firm in Malawi and also not licensed by the Regulator, Malawi Accountants Board (MAB) to provide auditing services in Malawi, to conduct forensic audit only on selected transactions, instead of all the transactions EDF undertook during the review period from 2017 and 2020, without following a competitive bid process as required by the EDF procurement procedures.

They add that without regard to the advice provided by the management regarding the irregularities explained above, Fletcher and Evance was suspiciously paid the sum of K25 million, tax payers’ money, by the Fund as audit fees.

“In addition, between July 2020 to date two members of the Board of Directors of Export Development Fund (EDF) namely; Mr Neil Nyirongo, Board Chairman and Mrs Agnes Sentala, Board Secretary have been taking unentitled fringe benefits, without even deducting income tax, from EDF on monthly basis comprising airtime and fuel contrary to the guidelines of benefits for the Board of Directors of EDF approved by the Shareholders meeting, the Annual General Meeting (AGM) of the years 2018, 2019 and even 2020 in the history of the Fund.

“According to the EDF conditions of service, only members of staff are entitled to such taxable fringe benefits. In addition, we are convinced that it is not lawfully acceptable for Mrs Agnes Sentala as a salaried employee of the Reserve Bank of Malawi to be taking fringe benefits from both the Reserve Bank and its subsidiary Export Development Fund,” reads part of the letter.

Handsome M’bwana was contracted to audit EDF despite not being a registered auditor in Malawi

It adds, “4. Without regard to gross abuse of office and conflict of interest, a member of the Board of Directors, Mr Tim De Borde was also given a commercial contract to sell agricultural commodity on behalf of the EDF comprising sugar beans and white haricot beans notwithstanding that there were indigenous Malawians that submitted a bid at the same time to buy the commodity for export markets. Mr Tim De Borde has since received the sum of K20  million as sales commission also without deducting income tax for grading and selling the commodity.

“Therefore, we would like your office Madam, to investigate on behalf of Malawians and take appropriate action against these acts of executive fraud and gross abuse of office and resources practiced by Members of the Board of Directors of EDF and the CEO.

“How the Members of the Board hand-picked Fletcher and Evance who is not registered as an Audit Firm in Malawi and also not licensed and certified by the Regulator, MAB to provide auditing services in the country, to conduct audit at EDF without following a competitive bid process as required by the EDF procurement procedures and contrary to the provisions of the Public Procurement Act is a mystery.

“How the members of the Board also have been taking tax free unentitled fringe benefits contrary to the guidelines of benefits for the Board of Directors of EDF and without the approval of the AGM is a mystery.

“We also believe that Mr Tim De Borde as a member of the Board of Directors of the EDF is grossly conflicted. We further believe that Mr Tim De Borde obtained unfair advantage in form of the tax free sales commission amounting to about K20 million he has taken over many other qualifying Malawians who were equally able to buy the commodity, sell to their export markets and earn a living,” allege the staff members.

They have sought the intervention of ACB Director General Martha Chizuma “within reasonable time as the Fund’s resources are being grossly abused, even by way of payments in form of sitting allowances resulting from unreasonable and unscheduled extraordinary meetings compared to previous years in the history of the Fund.”

“We wish to put it in your own words Madam, that the affairs of the EDF are being run by wrong people, at Board level, bent on fraud and corrupt practices as well as capable of facilitating fraud directly or indirectly. Your timely action is greatly appreciated,” the letter concludes.

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