Former President Joyce Banda entangled in a bribery scandal, facilitated serious oil fraud
Malawi’s former president Joyce Banda while serving as the country’s first and only female president in 2012 signed an executive order to acquire fuel supply which led to serious oil fraud and now a United Kingdom (UK) court has ordered a British firm to pay Malawi K600 million fine over bribery, fraud and corruption over a 2012 fraudulent oil transaction.
The Malawi erstwhile Head of State, Joyce Banda, who assumed office while serving as vice president in 2012 after the Republican president Bingu wa Mutharika suddenly died, signed the executive order soon after she took over reigns of power authorising the Nigerian National Petroleum Corporation of Abuja to supply 45,000 barrels of oil per day as prescribed by the laws of the Federal Government of Nigeria.
At that time, Malawi faced an acute fuel supply crisis in 2012 after development partners chickened out on former president Bingu wa Mutharika because of what they described as “excessive executive arrogance”.
This was a direct result of Bingu wa Mutharika’s despotic decision to expel British High Commissioner to Lilongwe Fergus Cochrane-Dyet, a year earlier, in April 2011, after he criticised his leadership as autocratic and dictatorial in a leaked diplomatic cable.
Cochrane-Dyet was given a formal letter of expulsion and was declared made persona non-grata, a development the European Union Delegation to Malawi bemoaned.
One of the consequences of the Malawi Government’s decision was a fuel shortage crisis of unprecedented levels.
Under panic, President Banda, in a quest to find solutions to the fuel crisis signed an executive order which opened up massive graft and bribery between a UK based mining and commodity company and very senior Malawi government officials.
This multi-million oil corruption debacle is not the only is not the only financial scandal during her two-year presidency, there was also a massive industrial scale looting under her watch called cashgate scandal in which billions of kwacha’s were embezzled from the public coffers.
Exactly 10 years later, UK’s court, Southwark Crown Court has ordered the FTSE 100-listed Glencore company, one of the largest mining and commodity trading companies in the Europe, to pay the Malawi Government K600 million over the 2012 fraudulent oil transaction between the and the Joyce Banda administration.
Passing judgment, Judge Peter Fraser ordered the company to pay the money after it pleaded guilty to bribery offences in June this year after Serious Fraud Office (SFO) – the UK government crime agency that is in charge of investigating and prosecuting of serious and complex bribery, fraud and graft cases – pressed the charges against Glencore.
According to the court judgment documents the K600 million fine that has been ordered to be paid to Malawi government is part of the £281 million (over K4 billion) fine the company has been ordered to pay in seven bribery cases pertaining to its oil business in Africa.
In his ruling, judge Peter Fraser noted that what the UK company did amounts to corporate corruption on a widespread scale; in this case, after it deployed substantial sums of money in bribes.
“Corruption was deep-seated in the African oil trading operation of Glencore Energy UK Limited, wholly owned by FTSE 100-listed Glencore. Corruption attracts unprecedented penalty, fines, confiscation of profit,” the judgement, made last Thursday, the judge ruled.
During the trial, The court learnt through the SFO that Glencore’s staff and middlemen gave kickbacks to the tune of £27 million to officials in Nigeria, Ivory Coast, Cameroon, South Sudan and Equatorial Guinea and Malawi.
According to facts of the case, a firm called Petroleos de Geneva S.A Limited was contacted by the Joyce Banda led Government to administer a government-to-government crude oil deal for two years between Malawi and Nigerian Petroleum Corporation (NPC) in 2012.
The SFO told the court that the company, Petroleos de Geneva S.A Limited entered into the contract with the UK film, but without any discount.
Glencore undertook to sell the oil and pass 60 percent of profits to Nigerian companies, something the court described as corporate corruption.
In his determination, the judge further determined that such corruption took place for an extended duration across five separate countries in West Africa as well as in South Eastern Africa.
During the court hearing, the SFO informed the court that employees of Glencore moved bribes to the five countries by way of private jets, using false documents to conceal the real purposes of the money.
However, Clare Montgomery, defending and representing Glencore, expressed regret for the damage caused to the African countries including Malawi.
Montgomery said: “The company regrets the harm caused by these offences and recognises the harm caused, both at national and public levels in the African states concerned, as well as the damage caused to others.”
Ironically, the problem of fuel shortage is back, a development the Malawi Energy Regulatory Authority is laying a blame on forex shortage in the country.
Malawi’s government is heavily dependent on foreign aid, with donor funding normally accounting for more than 40 percent of official receipts.
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