Germany demands  K2367bn ‘Cashgate’ justice: 7  Malawi ministers  shielded

German government has expressed concern over delays in prosecuting  the infamous K577 billion (about $856 million) plunder of public money between 2009 and 2014 now  reduced to un-reconciled amount  of K236 billion, according to the  forensic audit conducted by RSM Risk Assurance LLP of the UK.

In an exclusive interview with Nyasa Times, Germany Deputy Head of Mission to Malawi,  Thomas Staiger, who is also Head of Development Cooperation in Malawi, said  it is “disappointing”  that the progress  is very slow in bringing those who plundered public finances to book.

Straiger said Germany was expecting that all those cases would have been concluded by now.

He said German welcomes government’s commitment r to rooting out corruption in Malawi without fear or favour.

“Germany, as other development partners, stands ready to support the Malawian authorities to expose, punish and drive out corruption wherever it occurs,” he said.

Straiger urged Malawi Government to ensure that the office of the Auditor  General is independent from any political hand.

” Furthermore, the independence of the Auditor General, who led the process of the forensic audit, remains a critical issue for further improving integrity in the management of public finances,” he added.

Straiger also tipped  Parliament to quickly present, discuss, and pass the bill into law which will devolve constitutional bodies like office of the Auditor General and Anti Corruption Bureau to be independent from the Executive manipulation.

He said it is only independent ACB and other corresponding bodies which can deal with corruption aggressively.

Straiger has advised Malawi Government to pass the bill during the November sitting of Parliament in order to regain donor confidence.

“We sincerely hope that the prepared Bill will be tabled in the next  parliamentary session in November,” he said.

German has since expressed surprised over the findings of the audit which uncovered the K577 billion looting.

It says the audit uncovered a lot of gaps in financial systems.

“While we are not in a position to comment on ongoing investigations, the scale of corruption evident in the latest forensic audit report is deeply concerning. It is critical that the law enforcement agencies pursue their investigations to bring to justice those who have defrauded the Malawian people,” Straiger said.

“The audit identified accounting, procurement and contracting practices as key areas for concern where urgent reforms are needed to ensure transparent, efficient and prudent use of public finances in Malawi,” he added.

The audit evealed  that there has been collusive activities in the way government has been awarding its contracts confirming that bid rigging and manipulation has been plaguing the Capital Hill – the seat of government in Lilongwe.

The audit reveals that K83.5 billion was paid to 44 of the businesses which were selected as part of the sample of 50 businesses which matched to the bank transactions.

The report says to date, 13 businesses and K17.08 billion have been subject to review and that of these 13 cases alone have allowed the audit to identify at least $19.6 million in possible savings and recoverable costs.

These are $14.2 million in overpayments for goods and services; one duplicate payment of $5.45 million which the report says should be subject to immediate recovery; and $29 166 overpayment on shipping to wrong locations.

Accoring to the report, there is evidence to suggest that a number of cartels are winning contracts through restricted tender and single source procurements sometimes to supply quantities that do not reflect the actual needs of the MDAs.

“These groups of suppliers are owned by the same individuals with the majority of trade being inter-company implying that limited actual trade exists,” reads the report,  adding:“This suggests ‘layering’ a method sometimes used to hinder or prevent investigations in accurately tracing the source or destination of transactions and flow of funds.”

It reports that the use of bank cheques to move funds between related suppliers could be seen as an attempt to deliberately conceal the audit trail.

“Of even more concern is that we have gathered evidence which suggests that manipulated procurements have taken place as late as December 2015 and are therefore likely to be continuing,” says the report.

List of shame

President Peter Mutharika’s trusted allies are among 7 ministers implicated in the report.

Also named on the “list of shame” are Asian business persons.

But Auditor General refused to name and shame those implicated.

Public Affairs Committee (PAC)  asked government to speed up prosecutions of those involved in the ‘grand corruption’, saying there should be no sacred cows.

PAC chairman Felix Chingota courageously told President Peter Mutharika in the face to ensure he brings DPP and government officials to book if evidence linked them to the multibillion loot of government money at Capital Hill.

 

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