Malawi government on Thursday made public an audit report that among other details, reveals the of commercial banks that made transactions of the plunder of billions of kwachas from government coffers.
The scandal, famously known as Cashgate, led donors to suspend about $150m in budget support and aid to the Southern African nation. Malawi’s International Monetary Fund program also went off track because of the scandal.
Minister of Justice Sam Tembenu told reporters the 124-page Cashgate audit report conducted by British auditing firm Baker Tilly was ready for release on September 25, but the government has been consulting with law enforcement agencies that gave the go-ahead to make it public.
According to the report, 104 ‘cashgate’ cheques were paid into at least ten different commercial banks throughout Malawi with the highest amount deposited in Standard Bank (49 %). In comparison the lowest amount (1%) was deposited into OIBM.
The report says 22 cheques from 10 different businesses were banked at Standard Bank representing 49% of the ‘cashgate’ funds.
Analysis of the cheques deposited into Standard Bank shows the majority of this amount relates to two businesses being; IPS and O&G Constructions who received MK 1,860,584,273 and MK 1,140,738,209, respectively.
“These amounts total MK 3,001,322,562 which is 43.4% of the total ‘cashgate’ cheques. Both businesses are owned by Osward Lutepo,” reads the report in part.
Lutepo is the chief suspect in the cashgate scandal and is answering multiple charges.
“The second and third highest amounts were deposited in to [National Bank of Malawi] NBM and FDH Bank which received MK 970,620,798 and MK 898,276,664, respectively,” reads the report.
“ NBM was also the bank in which the highest number of cashgate cheques were deposited (28 out of 104) and the bank with which the highest number of businesses who were recipients of cashgate cheques held bank accounts (12 out of 39).”
The reports says the three banks which received the most cashgate cheques were Standard Bank, NBM and FDH Bank who between them received MK 5,219,344,243 (75.5%) of all the cashgate funds. The remaining 24.5% was split between at least seven different banks.
Baker Tilly said in the report that the audit is not a document suitable for legal use and is drafted for informational purposes and that “only further work will be required should there be a requirement for it to be relied upon in court or any other legal situation.”
It said the report is based on the facts established from documentation provided by the various representatives of the government, Reserve Bank of Malawi, various commercial banks, individuals and funding recipients interviewed.
“Where appropriate we have made reference to additional information and explanations obtained during the course of this review,” it explained.
Justice Minister Tembenu said government made a decision to release the report as “a matter of public interest,” saying now that the audit document is in public domain it will “end public speculation on what is contained in the report.”
Baker Tilly noted that during the evidence gathering phase of the audit NBM, the bank in to which the second high amount of cashgate cheques was deposited were unable to provide five of the 13 bank mandates requested from them.
“It is not clear if this was an attempt to block our work or relates to poor record keeping and ineffective internal controls operating within the NBM,” reads the report.
Contrary to popular expectation, names of suspects who allegedly stole from the public funds did not include senior politicians, including former president Joyce Banda and Vice President Khumbo Kachali whose names were linked to the scandal.
The report also names three law firms which benefited from “Cashgate funds” including the firm of former justice minister Ralph Kasambara.
The former minister is already answering charges related to Cashgate, which involve an attempted murder against former treasury official Paul Mphwiyo.
The ‘Cashgate’ involved a systematic plunder that involved public officers conniving with private sector firms and individuals.Follow and Subscribe Nyasa TV :