Malawi High Court judges accused of corruption “shielding” in MRA tax stamps tender
Civil society organisation in Malawi have accused a High Court and Supreme Court of Appeal judges for suspected shielding of corruption actors in the procurement scandal that favours a criminalised bidder from Switzerland.
Sources within the Malawi Revenue Authority (MRA) have blamed Board Member Lincoln Bailey, a Jamaican businessman married to a Kenyan woman as the leader of the syndicate championing the Swiss company called SICPA.
“This man [Lincoln Bailey] is boasting that his choice stands as he has the backing of President Chakwera. He calls himself the fixer and he is up to no good. He is full of himself and demeans Malawians,” said one of the procurement officers close to the matter.
President Chakwera indeed met the Chief Executive Officer of SICPA in Lausanne, Switzerland where he invited the company to lead in the digitization of government systems.
It is not known how much President Chakwera knew about SICPA that they were in an international tender process and rules of Malawi forbid such contacts leading to disqualification of the bidder.
“The President must be very careful as to whom he meets. His handlers must carry due diligence before accepting any requests or invitations. The Secretary to the President and Cabinet Mr ZangaZanga Chikhosi is blamed for this mess as he failed to carry out due diligence. Things like this smear the Head of State and it’s embarrassing,” said David Manda, Executive Director of Mzuzu based Centre for Corrupt-Free Society.
SICPA is facing criminal investigations in several countries for their involvement in corruption of government officials and politically exposed persons.
The High Court of Malawi has refused to grant an injunction to US based consortium bidder called Authentix Inc who challenged the legality of a tender cancellation by MRA soon after President Chakwera’s visit to SICPA head offices.
George Liwimbi & Partners queried The Public Procurement & Disposal of Assets Authority (PPDA) on 8th March 2022 demanding for reasons for re-tender but got nothing. On 24th March 2022, requested a review of the process and halt the re-tender process.
The objection letter was sent to MRA Director General Mr John Bizwick but drew no response.
A further petition was lodged with the High Court for an injunction on the re-tender as well as application for judicial review on the decision to re-tender after the PPDA failed to offer reasons and explanation on why they sanctioned the move by MRA.
On the 28th March 2022, Judge Simeon Mdeza heard the matter but only granted a judicial review without an injunction or stay on the re-tender process saying Authentix Inc had no legal basis for the objection and are an international company that will not pay damages for stopping the re-tender.
On the 29th March 2022, Authentic Inc applied to the Supreme Court in Blantyre for an injunction. The application was heard by Justice of Appeal Ivy Kamanga, who on 5th April 2022 ordered the matter to be brought as an inter parte application and refused to grant an injunction.
The matter has now been listed for hearing on 10th May 2022 well after the contract has been awarded.
David Manda said: “These irregularities from the judiciary are an injustice and shocking because they are assisting MRA and PPDA to get away with corrupt practices especially when we see that debarring clauses have been removed from the re-tender documents to allow SIPCA to “steal from Malawians.”
“President Chakwera must be careful with those he trusts especially when you know that Mr ZangaZanga Chikhosi brought in his puppet Eddington Chilapondwa at PPDA as Director General.
MRA with the help of PPDA limited anti-corruption barring requirements only to Malawi thereby disregarding international corruption and criminal activities to which SICPA are guilty of. They also removed technical scoring by introducing royalty fee as the most important aspect of the evaluation.
The schedule below are pricing evaluation results released at a public pricing meeting held on 3rd September, 2021.
| Bidder Name | Annual Price USD | 10 year Period USD |
|
10,469,268.00 | 104,692,680.86 |
| 2. SICPA | 8,819,129.40 | 88,191,294.00 |
| 3. AARAV Solutions | 10,571,650.10 | 105,716,501.89 |
| 4. De La Rue* | No bid price provided, price per tax stamp group only – Quantity schedule incomplete – exclude from bid | |
| 5. Kulinda Consortium | 3,177,900.00 | 31,779,900.00 |
| 6. Authentix Inc. | 6,309,300.33 | 63,093,003.30 |
| 7. Madras PSP | 6,678,803.55 | 66,788,035.50 |
Authentix Inc who was found to be substantially responsive and lowest evaluated bidder is challenging the MRA decision to retender the contract, fearing the action is a deliberate move to award the contract to SICPA.
MRA changed decided to retender with altered procurement rules after President Chakwera met with SICPA billionaire Chief Executive Officer Phillip Amon, in Lausanne Switzerland.
The procurement rules of course did not appear to apply to SICPA, who were, under bidding conditions, expressly forbidden to have any contact or influence with government officials during such periods.
The activists wonder why MRA would choose to flout its own laid down procurement guidelines in order to accommodate SICPA in a fiscal marks International Competitive Bidding process.
Centre for Human Rights and Rehabilitation Executive Director, Michael Kaiyatsa, described the revelations as “shocking”.
Kaiyatsa demanded that ACB should immediately launch investigations into the alleged “underhand dealings between MRA and SICPA”.
“The revelations are shocking. It is even more shocking to hear that the MRA flouted its own procurement guidelines to accommodate this company. Clearly, there is something fishy here and that’s why it’s important that the ACB should come in quickly to investigate this matter,” he reacted.
In his reaction, the Centre for Social Accountability and Transparency (CSAT) Executive Director, Willy Kambwandira, said it is unfortunate that institutions that are supposed to promote compliance and accountability are in the forefront violating their own laid down procurement procedures, the sudden change of in the bidding procedures smacks corruption, and we ask the Anti Corruption Bureau to investigate the matter.
Kambwandira said this is why CSAT has been encouraging government ministries, departments and agencies (MDAs) to embrace and promote contracting.
Forum for National Development (FND) National Coordinator, Fryson Chodzi, said he expected that the authority would not even bother including SICPA on the bidders’ list considering its tainted reputation.
“This criminal enterprise must be investigated and exposed. Malawians have suffered enough in the hands of a few cliché who are enriching themselves through abuse of their offices. We must never allow this issue to die a natural death,” emphasized Chodzi.
The MRA was aware of the following (below) adverse and debarring matters at the time of SICPA’s bid evaluation but surprising they slipped through the net to the next round.
- SICPA was in May 2019 investigated for allegations that it paid millions to finance ministry officials to secure a service contract to monitor production of beverages (beer and soft drinks) worth more than US$1 billion.
- SICPA’s then executive vice president Charles Nelson Finkel (in the case of “Federal Public Ministry vs. Charles Nelson Finkel”) created a fictitious company MDI Consultoria in order to transfer $14.5 million in bribes from the US to Brazil, giving an appearance of legality to the financial transactions through the banking systems with the conclusion of a fictitious contract of service provision and issuance of invoices for services never rendered.
- In May 2019, Charles Nelson Finkel was found guilty and sentenced to prison for 11 years and 6 months for corruption and bribery linked to obtaining and executing SICPA’s contract with the Brazil Federal Revenue. In June 2021, SICPA agreed to pay 135 million francs in a ‘settlement agreement’ with local authorities.
- The Attorney General’s Office in Switzerland got interested in the activities of SICPA, in thirteen other countries ranging from Egypt to India, via Venezuela, Vietnam and Ukraine.”
- In June 2021, the Swiss Public Ministry of the Confederation (MPC) extended its investigation to include SICPA billionaire owner and CEO, Phillippe Amon, in the investigation suspected of bribery of foreign public officials.
