Mulli Bros sues Deloitte for K2.1bn for defamation over firm’s Reserve Bank Forensic Audit Report

Mulli Brothers Limited (MBL) has taken to the cleaners an internationally renowned consulting firm, Deloitte Touche Tohmatsu Limited (Deloitte) for defamation in a forensic audit report for the Reserve Bank of Malawi and are seeking for a staggering K2.1 billion payout as compensation.

According to court records, earlier this year, Deloitte released a damning audit report for the country’s Central Bank covering the period between January 1, 2019 and June 30, 2020 in which Mulli Brothers was implicated.

Leston Mulli of Mulli Brothers: suing for K2.1 billion 

In the report Deloitte outlines and details how Reserve Bank of Malawi officials allegedly twisted and bent own rules to facilitate payments, including some which the commissioned auditors, Deloitte, described fabricated and fraudulent.

The auditors, Deloitte said in the report that Mulli Brothers Limited (MBL) was among those named to have benefitted from the financial improprieties at the Central Bank, Reserve Bank of Malawi.

The report, among others, claimed Mulli Brothers was insanely overpaid through the Fertiliser Inputs Subsidy Programme (Fisp).

However, this has not gone down well with Mulli Brothers as they think that with the report, which they believe to be damaging, the auditors, Deloitte has injured the organisation’s reputation hence they have filed for a civil suit of defamation so they can get a legal redress.

In their summons, Mulli Brothers, through their lawyers, Ritz Attorney at Law, queries Deloitte for stating that the firm and Jean Mathanga, wife to former RBM deputy governor, were benefitting from hefty loans from the Central Bank for their businesses.

According to court documents, in the audit report, Deloitte said it was investigating an “allegation that RBM was financing dubious payments for DPP business owners that are being used as conduits for siphoning money from government.”

“The Defendant proceeded to state that: ‘…The Mulli Brothers and Jean Mathanga (the wife to RBM Executive Director) were benefiting from hefty loans from RBM for their businesses. The Mulli’s and Mathanga’s were paid money four times for the Farm Input Subsidy Program (FISP) and payments were made before the contracts were awarded to other suppliers…”reads in part the court document.

Deloitte is being represented by Messrs Sacranie, Gow & Company, according to a notice of appointment of legal practitioners from Sacranie, Gow & Company dated September 2, 2021.

In its amended summons filed on August 30, 2021 at the High Court, Mulli Brothers Limited is therefore demanding a total of K2.1 billion in Civil Case Number 328 of 2021.

“The claimant seeks from the court an order and/or a declaration that the Forensic Audit Report by the Defendant in as far as it relates to allegations concerning the claimant breached International Standards of Auditing and is not credible,” reads the summons.

In the case Mulli Brothers is demanding K100 million as compensation for damages for false reporting and/or false representation and malicious falsehood.

Mulli Brothers is further demanding another K100 million for general and aggravated damages for what they are calling them as negligence, negligent misstatements, representations and misfeasance.

The company also further claim for K100 million for damages for professional negligence and also K200 million for defamation libel due to loss of business reputation and standing.

In addition, the company has demanded another K100 million for malice and/or bad faith and another K1.5 billion for loss of business and business value occasioned by the report.

The court has asked Deloitte to pay the costs or challenge the summons within 28 days.

“We command you within 28 days after the service of this summons on you, inclusive of the day of service, you must either satisfy the claim or file with this court a defence and list of documents.

“If you do not intend to contest the proceedings, you must within 14 days after service of this summons on you inclusive of the day of service return the accompanying response stating therein that you do not intend to contest the proceedings but desire a stay of enforcement of judgment, if any,” reads the summons dated September 2, 2021.

The summons says if Deloitte fails to pay or file a defence or return the response within the stated time, the court may proceed to give judgment against it.

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Luther
Luther
2 months ago

I just hope Mulli is really clean by suing the audit firm. Government wanted credible audit exercise when they contracted this institution to undertake the assignment. If Mulli are here to save face thinking they will be spared they will be in for a shock!!!


Patriot
Patriot
2 months ago

Sad, sad, sad! There are so many such incidents where rich people and companies are able make connections to siphon away public money. The rich get richer while the honest, god fearing, low abiding persons continue to suffer for simple basic necessities. That network of ‘you scratch my back and I will scratch yours’ appears to be blessed by God in their enterprises of getting their reward from not hard work but ingenious scheming. I wish I had the guts to join and no conscience which allows me to sleep at night.

tman
2 months ago

Mwamputa Murupale,kazitengeni mapwiya tiyendesere chipani

Jah
Jah
2 months ago

Exactly what mcp is doing

Tione
Tione
2 months ago

This will definitely be a fierce battle and an interesting case involving private companies. We will learn a lot from this. I can only wish both parties the best as the win will be huge for whoever triumphs and a big loss for the loser.

Phaloni
Phaloni
2 months ago

Ukazolowera kulandira zaulere ndichoncho…U can’t help it akakudulira njira zobera ndalama zaboma..

President Mkango Chisokonezo Manthakanjenjemereza
President Mkango Chisokonezo Manthakanjenjemereza
2 months ago

Let me fault Mulli alittle bit. The audit of government agency is gone by the National Audit Office. The National Audit Office subcontraxted the Deloitte now that make the report for the National Audit Office since the Reserve Banl is a government Agency. Under the Public Audit Act no6 of 2003. The members of the National Audit Office are immune from civil liability in course of their work. There may be the implication also for the sbub contacted work for the Natonal Audit Office.

Kennzo
Kennzo
2 months ago

Thats how these criminals operate, its pre-planed they received Billions from Dpp.

nafundo zalo
nafundo zalo
2 months ago
Reply to  Kennzo

and kacikenaso

Russie
Russie
2 months ago

Another step in the right direction. Mulli’s skeletons will come out for all Malawians to see. Is Deloitte so careless as to want to taint the image of Mulli?

Fwangalubiro
Fwangalubiro
2 months ago
Reply to  Russie

An interesting case to follow really with all ethics at there disposal can really they be so careless

Anzanufe
Anzanufe
2 months ago

Teach them a lesson!

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