High Court judge Charles Mkandawire on Wednesday adjourned the case involving Malawi Energy Regulatory Authority (Mera) fired chief executive officer (CEO) Ralph Kamoto who is challenging unfair dismissal over allegations of abuse of office.
In February 2017, the Mera board fired Kamoto and director of finance Elias Hausi for alleged abuse of office when the authority used K2.9 billion from the the Price Stabilisation Fund to buy 10 000 metric tonnes of maize for the Agricultural Development and Marketing Corporation (Admarc) to sell in its markets.
The PSF is an account that accumulates funds from fuel sales meant to cushion any rises in fuel products that would raise inflation. There are four levies in the energy price build up, as established in the Energy Laws of 2004, namely the Road Levy, Malawi Bureau of Standards Levy, Rural Electrification Levy and Fuel Price Stabilisation Levy.
The judge adjourned the matter because lawyer George Mwale representing Kamoto was yet to provide an affidavit to vacate an injunction lodged earlier against his dismissal that he should not be dismissed.
A report by an independent assessor, PricewaterhouseCoopers (PwC), confirmed that the Malawi Energy Regulatory Authority (Mera) Board made an unlawful K2.9 billion payment to Admarc for the purchase of maize.
Mera board on February 24 resolved to purchase 10 000 metric tonnes of maize at a cost of K2.964 billion, to be sent to Admarc for sale in its markets, according to a letter dated February 25 2016 from Mera to Secretary to Treasury and copied to Chief Secretary in the Office of the President and Cabinet, and the then Mera board chairperson Dingiswayo Jere.
Mera letter reads: “Although the board noticed that the drought/maize levy was abolished in 2012, the board agreed to purchase maize from the Price Stabilisation Fund.
“In arriving at the decision, the board recognised that the current drought has affected a lot of Malawians who did not have adequate access to maize stocks.”
The board further noted in the letter that the drought/maize levy which would have collected funds for the drought was removed from the pricing structure in May 2012.
“The board, therefore, decided that the maize purchase should be funded out of the Price Stabilisation Fund [PSF].”
Ironically, barely two weeks after the Mera board’s decision, fuel prices were raised effective March 4 2016 to K743.30 per litre for petrol from K711.90, representing an increase of 4.41 percent and K722.80 per litre for diesel from K671.30 per litre representing a 7.67 percent rise.
In its statement justifying the increase, Mera said it considered recent trends in the world petroleum prices and other changes in macroeconomic fundamentals, notably exchange rate and their impact on energy prices as the reason for the hike.Follow and Subscribe Nyasa TV :