Rights activists, the Human Rights Defenders Coalition (HRDC) has written the Anti-corruption Bureau to investigate former Merdef chief executive officer over dubious loans awards.
In the letter, HRDC says it had received allegations that the CEO, Ms. Mervis Mangulenje, awarded a MK60 million loan to her close friend, David Banda, without following procedures.
David Banda is the owner of Chita One Investment.
“It is further alleged that the CEO awarded a loan amounting to MK7 million to her blood sister, Rockiah Amara Dinn, without following procedures.
“It is further alleged that MARDEF had planted a “youth equipment” in Nkhotakota which was repossessed and given to Christopher Chaduka of Kutacha Investment. Chaduka is allegedly a cousin to Ms. Mangulenje. The equipment is valued at MK33 million.
It is alleged that Chaduka planted the equipment in Mzuzu and was subsequently given a loan amounting to MK12 million to operate the equipment.
“To date, Chaduka has only repaid MK800,000.00,” says the letter in part
The letter says it is further alleged that the equipment has been moved to an unknown location.
HRDC also alleges that that a MK3 million loan was given to Phocas Sikaloka without following procedures.Sikaloka is MARDEF’s Head of Support Services.
The loan, says the letter, was given to a dairy farm business which he jointly runs with a Mr. Thomas Nthenda at Bvumbwe in Thyolo.
“We have also received specific allegations against the Internal Audit Manager, Mphatso Naveya.
“It is alleged that he facilitated granting of loans to his wife, his sisters, his brothers and his inlaws (table of loans to Naveya’s relatives attached),” says the letter.
The letter says that an audit report by the Central Internal Audit Unit indicates that there was “gross abuse” in the disbursement of MARDEF Loans.
The report highlights multiple disbursements of loans to the same beneficiaries, which resulted in over disbursement, the HRDC says.
The HRDC says the report highlights non-traceable beneficiaries.
“The report states that 35 out of 326 sampled loan beneficiaries that received MK64,335,000.00 could not be physically traced by the audit team together with MARDEF officials at the branch where the loan was supposedly obtained from.
“The audit report also highlights that ordinarily loan applicants should be verified by MARDEF branches. However, a review of loan files established that 158 (16%) of the 1003 sampled loan files amounting to MK287,564,456 were processed by Head Office bypassing the procedures that were supposed to be performed by branches,” reads the letter in part.
The HRDC says a total of 22 out of the 158 files had forged authorization of branch officers while the remaining 136 had loan application and other records that initiate the loans not signed by branch officers.
These loans, the HRDC says, were directly handled by Executive Management which consisted of the CEO, Head of Operations, Internal Audit Manager and the Risk and Compliance Officer.
The letter says consequently this lead to anomalies including loans that could not be traced to a particular branch, beneficiaries that were only traced by the audit team but not known by any branch and funds that were idle in bank accounts of beneficiaries because of neither the beneficiary nor their branch knew about the disbursement.
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