Mulli should be forced to pay back Malawi Savings Bank loans -Parliament

The Budget and Finance Committee of Parliament has recommended that government should force Mulli Brothers conglomerate and others who owe wholly-state owned Malawi Savings Bank “toxic” loans to pay back and ensure they recapitalise MSB to enable it meet regulatory requirements on capital and liquidity that authorities once put at around K23 billion (US$5.1 million).

Opposition lawmakers claimed in parliament that government wants to hand over the bank to FDH Bank, owned by Thom Mpinganjira, whom Malawi Congress Party (MCP) MP Peter Dimba described as “Mutharika’s crony, tribesman, DPP campaign financier who sits on the public reforms commission.”

In his report to Parliament on Wednesday, y following its consultations in March this year, chairperson of the committee Rhino Chiphiko said they have found that if government helped the bank to collect money on its non-performing loans from politically exposed individuals and companies, it could be in a healthy financial position to be sold to the public through an initial public offering.

“Government should assist MSB board by forcing Mulli Brothers to pay back long outstanding debts and the courts should exercise their total independence and expedite the Mulli case,” said Chiphiko.

Many people have described MSB sale deal as similar to Cashgate—the systematic plunder of billions of kwacha from Treasury.

Government had indicated that they set up a yet-to-be-named independent agency to collect outstanding loans owed to MSB.

It was reported that two of the individuals earmarked for the job are Chadwick Mphande, former chief executive officer of Carlsberg Malawi Limited who also serves as a director of NBS Bank and chartered accountant Nkondola Uka, a managing partner in accounting, audit and business advisory firm Deloitte.

The strategy is for the team to collect the debts owed to MSB to demonstrate that government was not bailing out the politically linked debtors.

Meanwhile, Budget and Finance Committee of Parliament accused the Public Private Partnership Commission, the Reserve Bank of Malawi and Capital Hill of using guess work to determine the value of the bank.

“The committee is concerned that the bank maybe sold for a song. The difference in information on the current value of the bank and amount required to take it back on its feet shows that no independent valuer has been engaged to determine the real value of the bank,” he said.

Minister of Finance Goodall Gondwe would be put before President Peter Mutharika who would make the final determination on the fate of the bank.

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