Ex treasury chief Kutengule speaks out on fertiliser deal

Former Secretary to Treasury, Dr Milton Kutengule, has reacted to a leaked report by Anti Corruption Bureau (ACB) which implicated him in a 2005 fertiliser subsidy deal the bureau claims wasted  $6.9 million (about K2 billion at present exchange rates).

Kutengule left the ministry of finance in 2008 in connection with a mysterious  K20 million Credit Scheme Account  he is alleged to have opened at a commercial bank for which he was the sole signatory to all transactions that followed.

According to the ACB Investigation Report Ref. ACB/CR/BT/155/06  in Nyasa Times possession, he conducted  “in a manner conducive to corruption” in the process of awarding Pioneer Chemicals of Saudi Arabia the first fertiliser subsidy contract meant for the 2005/06 farming season.

Kutengule and Nebert Nyirenda, who is now Principal Secretary at the Ministry of Trade and Industry, reportedly worked with former finance minister Goodall Gondwe to influence  Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM)  management to fertiliser against the country’s set public procurement laws, regulations and procedures.

Fertiliser subsidy programme in Malawi riddled with corruption

But Kutengule has hit back at ACB, explain that he  left  Ministry of Finance on 14 July 2005 when government had not yet procured any fertiliser.

“This was because the budget had not been approved due to the Section 65 / Budget / impeachment issues in Parliament. I therefore did not play many roles in the procurement of the fertiliser as suggested by the [report]. The only significant thing I did on this matter was to advise SFFRFM on how they could borrow funds for the procurement of the fertiliser in line with the Public Finance Management Act,” he said.

Kutengule pointed out that  SFFRFM needed to borrow funds from a bank for the procurement of the fertiliser.

Denies corruption allegations

He denied the assertions that he conducted in a manner conducive to corruption in the fertiliser procurement.

“Advising the SFFRFM management on the requirements of the Act cannot be said to be something like instructing SFFRFM to procure the fertiliser from a single source as implied by report and ‘conducive to corruption’ unless the meaning of corruption includes whatever anyone in the position of Secretary to the Treasury advises on Public Finance Management Act provisions for public sector borrowing requirements,” he said.

Kutengule noted that the report suggests that he was involved in some instructions or directives , but  challenged: “The truth is no one will ever produce evidence of such instructions or directives because that never happened.”

“Corruption is well defined in the Corrupt Practices Act such that the ACB should be last entity to ascribe any issue to corruption. Professionalism, integrity and the law will require them to prove the basic elements of corruption before making any allegations of corruption,” charged former government treasury chief.

“ It is corruption of the highest order for the ACB to be calling anything corruption. If you read Section 94 of the Public Finance Management Act, you will understand why the ACB needs to appreciate other existing laws governing the actions of other public officials before making allegations such as those covered in the article,” he added.

 ACB report logically deficient

Kutengule  said he has not seen the ACB report but only read the news article, saying  based on what has been reported, the report is  “factually and logically deficient”  in relation to what he  said in his  official capacity as Secretary to the Treasury.

“ From what I recall, the procurement of fertiliser from Pioneer Chemicals was approved by the SFFRFM Board of Trustees, through a formal resolution, based on a recommendation from SFFRFM management that Pioneer Chemicals’ quotation represented the best value for money. I therefore find it strange that someone wants to suggest that SFFRFM was forced to buy the fertiliser from that company. If someone  did so, then that happened not through my office,” he explained.

“ As far as I know, it was an SFFRFM procurement process and that Resolution cannot be ignored in such a report from the ACB. If there was any misprocurement, that happened within SFFRFM and I was not involved in that.”

Kutengule acknowledges that there was indeed an SFFRFM fertiliser prices surveillance team which went to several countries to identify cost-effective sources of fertiliser in preparation for fertiliser procurement in the 2005/2006 financial year but that he was not involved in the implementation of the 2005/2006 budget.

“The Secretary for Agriculture was the Chairperson of SFFRFM and he was supposed to lead the surveillance team but he had told me that he would join the team later due to other engagements. Furthermore, I do not recall seeing the team’s report. What was the problem or corruption in letting the team know that the Team Leader had been delayed, as insinuated in the article or report?” he wondered.

He said the meeting he had with SFFRFM management on their return from the Surveillance Mission, before going to the Minister’s office, discussed how SFFRFM could borrow funds to finance the procurement of fertiliser from Pioneer Chemicals.

“They needed Government’s Financial Guarantee as required by the Public Finance Management Act and I advised them on how that could be done. The advice I gave them did not, in any way, force SFFRFM to buy the fertiliser from Pioneer Chemicals. What is the Act for if advising officials to follow what it says is ‘conducive to corruption’? Where is coercion here if management recommended to its Board that the fertiliser be procured from Pioneer Chemicals?” wondered Kutengule.

Where is Justice?

Kutengule also commented on  his arrest on October 17, 2005, by ACB  on allegations that  he used his public office for his own advantage to open an account where he was a sole signatory being an act which resulted in theft of government money amounting to K15,767,565. 00.

He vehemently denied any wrongdoing in the allegations.

“I was arrested by the same ACB just because I instructed a Director of Finance (Mr Nsandu) to open an account for MARDEF which he did. I was arrested although I did not go into a banking hall to open the account,” he said.

“ In fact, Section 32 of the Act mandates anyone holding the position of Secretary to the Treasury (ST) to open and close a government account with any bank whether in Malawi or outside, for government business, and I found it strange that the ACB ignored this provision of the Act,” said Kutengule, adding “ This explains why my case of 2005 has not yet been concluded in the courts. Where is the rule of the law then? Where is justice then?”

The former Education Minister Yusuf Mwawa  told the parliament’s Public Accounts Committee that the account at the disbanded Finance Bank was also used to finance various activities of late Bingu wa Mutharika’s Democratic Progressive Party (DPP), which he formed after breaking away from the former ruling United Democratic Front (UDF), which campaigned for his presidential victory in 2004 .

Before taking the Treasury job, Kutengule  had been Mutharika’s principal secretary when the latter was minister of economic planning.

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