FAM replica jersey business turns into financial fiasco
The much touted replica jersey business venture Football Association of Malawi (FAM) launched in August has become the worst financial nightmare in the FAM’s history, Nyasa Times understands.
With an initial principal capital of K36 million invested in the venture to purchase the replica jerseys from PUMA in South Africa and a further K30 million debt sought from a local bank to ransom the stock from the Malawi Revenue Authority (MRA), FAM’s sales are below K4 million as the year draws to a close.
According to a sponsorship deal struck in October 2010 between FAM and PUMA, the Football Association committed itself to buying new stocks from the sponsors every year. What this means is that as the old consignment is still warming the warehouse, FAM will have to buy a new stock in the coming year which begins in a couple of weeks from now.
Simple arithmetic calculations indicate that to date, four months after commencement of replica jersey sales, FAM has only recovered around K4 million from an investment of around K66million with no prospects of ever improving on the volume of sales.
Judging by documents sourced by Nyasa Times in the wake of an ongoing fraud investigation which was being carried out by Malawi’s fiscal police but suspiciously halted, the bank records on the transactions made so far on the Replica Jersey Special Account FAM opened lately with one major commercial bank, the volume of sales are quite dismal and the prospects for any improvement are very deem due to the prohibitive K9 000 per unit selling price when similar jerseys from same supplier of same quality are selling at K2 000 in Lilongwe and Mzuzu.
Worse still, it is rumoured that the collateral used to borrow for MRA purposes was the multi-million FIFA-funded Chiwembe Technical Centre itself, something FAM is not disclosing publicly.
The famous FAM Account designated for Replica Jerseys Commercialization also show deposits of funds from Government meant for other national team endervours with corresponding encashments.
Football officials wondered how come only one person is cashing from the account against standard practice of generating payments through cheques to enhance corporate governance.
The account opened fraudulently without the Executive Committee approval came into force on 26 August 2011 with initial deposit of K10,000.00 and K1,500,000.00.
A series of cash cheques commenced on 15th September 2011 in the amount K649,225.00 followed by an avalanche of several others.
Delegates to the FAM AGM are demanding “a truthful disclosure” from the outgoing FAM Executive Committee about the prevailing state of affairs concerning the replica jersey sales well before voting begins.
Incumbent FAM presiden Walter Nyamilandu said they opened the account at NBS bank “for proceeds of replica jerseys” and that they followed right procedures to open the account.
“First and foremost it is not wrong to open a bank account; it is common practice that when you are running business you must open an account. We haven’t flouted any procedure at all. That account has joint signatories,” he explained.
Nyamilandu said the account will be subject to transparent audit by KPMG.
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