The controversial sale of Malawi Savings Bank (MSB) has been suspended following a court order stopping the transaction, the Public Private Partnership Commission (PPPC) has confirmed.
Ministry of Finance, Economic Planning and Development, through the Public Private Partnership Commission (PPPC), was set to conclude sale of between 51 and 75 percent shareholding in the bank, following failure to recapitalise it and adhere to regulations requirements by Reserve Bank of Malawi (RBM).
PPPC announced the designation of FDH Financial Holdings Limited, the parent company of FDH Bank, as the preferred bidder to invest in MSB and is offering K4.9 billion to buy 75 percent stake.
But MSB employees rushed to court to prevent the transaction being completed.
PPPC chief executive officer, Jimmy Lipunga, said the commission could not proceed on the matter with a court order in force.
“That order prevented us from proceeding to the next step,” said Lipunga.
Lipunga said the commission was worried with the injunction as it will delay the process to re-capitalise the bank.
“The court order stops us from concluding the matter and it will have implications on progress and targets on the transaction,” said Lipunga as quoted in the Daily Times.
He said the stalemate is also making the process expensive as a lot more time would have to be used in the transaction.
“And the longer it would take, the more costly it would be on our side,” said Lipunga.
MSB workers want the court to interpret if the sale of the bank is in line with Public finance management act and Public Partnership Act (PPA).
The members of staff are worried that should the sale of the bank be illegal it will affect the contracts of the workers.
Minister of Finance is the first respondent, Public Private Partnership is the second respondent while Malawi Savings Bank is the third respondent.
Critics have argued that proposed K4.49 billion price offered as an “epic swindle.”Follow and Subscribe Nyasa TV :