Cashgate convict who is state witness, Leonard Kalonga has told the High Court in Lilongwe that former Ministry of Finance budget director Paul Mphwiyo recruited cashgate prisoner Oswald Lutepo as chief looter in the scandal.
Lutepo is serving a 11 years jail for a major role in the “Cashgate” corruption scandal that led to a cut in foreign aid to the poor country.
He was the chief suspect in the fraud, which was the biggest financial scandal in Malawi’s history and helped push former president Joyce Banda out of power at 2014 elections.
Kalonga said Lutepo wa sone of the “big contractors and suppliers recruited by Paul Mphwiyo” in the K2.4 billion Cashgate in which Mphwiyo is the first accused and he is co-accused with 18 others.
But Kalonga said he wondered why Lutepo’s companies were not appearing on the list of suppliers and contractors for the scheme.
“The other big supplier was Lutepo through his various companies. Unfortunately, his companies don’t appear here,”Kalonga said.
“If we had an opportunity of having main documents that were sent to the Accountant General’s Department Office and Financial Intelligence Unit, we would have an opportunity to see all the suppliers,” he added.
Kalonga said all compnaie that were involved un the cashgate scheme should appear on the charge sheet.
Jailed Lutepo was a senior party official in People’s Party (PP) as well as a wealthy businessman. He joined PP from Democratic Progressive Party (DPP).
The scandal, which originated in 2005, prompted foreign donors — who provide around 40 percent of Malawi’s budget — to pull the plug on aid worth around $150 million.
The arrest of Accounts assistant Victor Sithole in August 2013 – now serving jail after he was found guilty of stealing more than $66,000 in cash- kick-started what became known as the “cashgate” affair – the worst financial scandal in the country’s history.
It became public knowledge a month later following the shooting of the finance ministry’s then budget director Mphwiyo.
Former president Joyce Banda ordered an audit which British forensic auditor, RSM (formerly known as Baker Tilly), undertook between April and September 2013 and established that about K24 billion was siphoned from public coffers through dubious payments, inflated invoices and goods or services never rendered.
A financial analysis report by audit and business advisory firm PricewaterhouseCoopers (PwC) also established that about K577 billion in public funds could not be reconciliated between 2009 and December 31 2014.Follow and Subscribe Nyasa TV :