Minister of Finance, Economic Planning and Development Goodall Gondwe has confirmed knowledge of a K567 million interest payout controversy involving food supplier Pioneer Investments and Malawi Police Service (MPS).
Nyasa Times reported recently that the Auditor General Stevenson Kamphasa was “bulldozed” to authorise a payment to a company owned by filthy rich Asians, Pioneer Investment for 500 000 units of food rations it supplied to Police.
According to documents in possession of Nyasa Times, the company is claiming K567 million in interest for what it says was late payment from January 1, 2016 to June 30, 2017 for goods which were supplied to government after receiving advance payment.
Initially, the Auditor General rejected the claim on interest, according to a memo seen by Nyasa Times dated 12 September 2017 reference number Aud/conf/03 but there has been change of heart following political pressure.
According to the contract, the agreement was for K2.3 billion to deliver food rations within 20 weeks starting from the day the contract was signed.
The contract, which was for supply of corned beef, energy biscuits, energy juice and pilchards, has no specific interest clause.
Finance Minister Gondwe has since commented on the matter as he confirmed that after being asked to audit the interest payment query by Pioneer Investments, National Audit Office (NAO initially authorised Treasury to pay the interest.
“That’s correct; the Auditor General first said ‘pay,’ and now they are saying ‘don’t pay’. We wrote the National Audit Office, after they said ‘pay them the interest,’ because—in our records—this company was paid in time and in full,” Gondwe said as quoted in the Weekend Nation.
According to Deputy Inspector General of Police Duncan Mwapasa , the Police advised Treasury not to pay the claim.
He also insisted that there was “no clause about paying the supplier interest if we delay to pay the sum”.
But Pioneer managing director Zamir Karim, insisted the demand for payment of interest was legitimate and accused police of a breach of contract.Follow and Subscribe Nyasa TV :