Ombudsman exposes rot at Central Medical Stores Trust: ‘Mutharika illegally appointed Kuyeli’

Ombudsman Martha Chizuma has released a report on her investigation of alleged unprocedural, improper and irregular recruitment of some members of staff at the Central Medical Stores Trust that involved former president Peter Mutharika, Office of the President and the Trust’s chief executive officer (CEO) Dr. Feston Kaupa.

Dated March 25, 2021, the Ombudsman says the report follows investigations in various parastatals after receiving complaints of irregular and nepotistic recruitments, unfair treatment and abuse of power and public resources among others.

The Central Medical Stores Trust investigation was conducted after she received an anonymous complaint from people who called themselves ‘Anonymous Concerned Citizens’ and her office reviewed relevant documentation and engaged Kaupa himself; the Department of Statutory Corporations; former Comptroller of Statutory Corporations, Stuart Ligomeka; the former chairperson of Central Medical Stores Trust, Hilda Singo and all the concerned officers.

One case involved a postponement of a first interview for the position of director of procurement and the complaint claimed that the functional review that created this position was not yet approved and argued further that it was also postponed because Department of Statutory Corporation was not involved in the process.

The Ombusdman rules that this was totally unjustified as “the Central Medical Stores Trust Deed does not include Department of Statutory Corporation in its Board composition”.

“The Central Medical Stores Trust Board rightly conducted itself and within the law when it refused Department of Statutory Corporation’s inclusion on its Board.

“Accordingly, the subsequent bulldozing by Department of Statutory Corporation into Central Medical Stores Trust Board and usurping the powers in the recruitment process of the position of Director ofProcurement was illegal.”

The Ombudsman rules that the appointment of Rex Kuyeli by the Office of the President and Cabinet to the post of Director of Procurement which he even never applied nor interviewed for, “indignified public service management and breached the principles of fairness and open competition”.

“This was contrary to the Public Service Act and Central Medical Stores Trust’s own Terms and Conditions of Service. The said appointment and subsequent confirmation by the Board was illegal and irregular — it was maladministration.”

On accusation that CEO Kaupa influenced Kuyeli’s recruitment did not have supporting evidence and therefore was dismissed since this was done by the Office of the President and Cabinet — through the Department of Statutory Corporation.

It was further alleged that Dr. Bob Chulu was not one of those that were submitted to the Appointing Authority for possible appointment to the position of Director of Procurement yet his name was included on the interview report as one of the successful candidates when he had not even attended the said interviews. The Ombudsman contends that this process “is quite wary”.

It is also reported that Charles Khombeni’s name was subsequently removed from the list of of those who actually attended interviews and scored above 70% and was therefore amenable to be appointed and the Ombudsman says this “goes beyond it being a mere mistake”.

“When one looks at how Mr. Rex F. Kuyeli’s name was simply plucked from nowhere and appointed, this so called mistake becomes seriously suspicious leaving one with a feeling that there was an attempt to botch this stage of the process as well.”

The Ombudsman also faults the failure by Central Medical Stores Trust to advertise the post of the Branch Manager internally when there were about four candidates who qualified for the post, saying this “was illegal and irregular as it was contrary to section 4 of the Public Service Act and Clause 5.2.1 and 5.2.3 of Central Medical Stores Trust’s Terms and Conditions of Service”.

“The usage of performance appraisal of Mr. David Kulemela as the only determining factor for appointing him as Branch Manager was contrary to clause 5.2.1 of the Central Medical Stores Trust’s Terms and Conditions of Service.

“The subsequent appointment of Mr. David Kulemela as Branch Manager without interviews was not in line with existing laws and procedures, it was made in contravention of the Public Service Act and the Terms and Conditions of Service of Central Medical Stores Trust — this was maladministration.”

The Ombudsman also looked at the allegation that the CEO Kaupa single-handedly picked Joe Khalani as Director of Pharmaceutical Operations against the decision of the Board, saying this was untrue since Khalani was on the list of the recommended candidates as he was on second position during the interviews.

“It makes for good corporate governance to give an opportunity to the appointing authority to choose from two or three qualifying candidates so long as the process of arriving at the decision is fair, objective and open.

“Accordingly, there was nothing wrong for the Board to have two names to choose from for this position. [however] the decision of the Board to abandon its legal duty to finalize the appointment and allow itself to be bulldozed by the Department of Statutory Corporations and submit the names of qualifying candidates to Office of the President and Cabinet for final appointment is a serious neglect of duty. This was maladministration.”

The report also faults Mutharika in approving the subsequent appointment of Khalani, saying is was seriously irregular as “the President exercised the powers that he did not have in this case”.

“He was a wrong appointing Authority with the right one being the Board who at first had appointed Ngiwira only to be overruled by Office of the President and Cabinet.”

The Ombudsman further rules that Maxwell Chimkokomo, who had complained to her office that he was unfairly dismissed, is at liberty to follow through a legal lawsuit just as her office had ruled in 2014, arguing that his case was purely labour related as such it could be handled by the Industrial Relations Court.

In presenting directives and recommendations aimed at providing redress to the maladministration proven by the investigations, the Ombudsman says the recruitment of Kuyeli as Director of Procurement was illegal and irregular right from the start.

“In other words, his employment contract legally never existed. I, therefore, nullify the purported three-year contract that was granted to him on 10th October, 2019.

“Despite the fact that he has served most part of his contract his attainment of Director of Procurement position was through backdoor means and an act of favoritism. This is something that as a country we must collectively frown upon.

“Consequently, in the event that Mr. Kuyeli is entitled to any accrued benefits under the illegal contract I have just nulified, the same should not be paid to him.

“If he has any such claim it should not lie to Central Medical Stores Trust but to the former President who illegally appointed him. Mr. Rex F. Kuyeli should revert to his old position of Senior Logistics Officer which is vacant at the moment. The Board should take necessary steps to effect this directive.”

The Ombusdman further say ordinarily she would have direct that the rightful candidate, Ipyana Mwabumba, who was appointed after the interviews be offered the job, “however, the very process that was used in these second interviews for the post of Director of Procurement was illegal and highly chaotic and accordingly cannot be trusted”.

“The Department of Statutory Corporation, which had no any legal mandate, hijacked the whole process and the final appointment though it was rescinded on same day was made by the President who had no legal authority to make such appointment.

“Added to this is the suspicious removal of one of the qualifying candidates Mr. Charles Khombeni and the subsequent inclusion of a candidate that neither applied nor attended the interviews on the interview report.

“In view of this, I direct that there should be fresh recruitment process and this should be completed by 30th June 2021.”

The report further says the Office of the Comptroller of Statutory Corporations is very important in as far as oversight of the statutory corporations in the country is concerned but in the absence of a proper governance structure that clearly stipulates its functions and responsibilities this Office has and will continue getting involved in all kinds of illegalities.

“And is has and will continue being used as a puppet of the Office of the President and Cabinet especially the Office of the Secretary to President and Cabinet.

“In order to avoid this unfortunate situation in the future I direct that from now onwards the Comptroller of Statutory Corporations only attends those meetings of Board of Parastatals whose legal framework clearly provides for the office’s membership.

“For those parastatals whose legal framework do not include the Comptroller of Statutory Corporations in its composition of the Board but their legal instruments provide for an option to coopt other members, to immediately coopt the Office of the Comptroller of Statutory Corporations in their respective Boards with clear prescription of what its role would be.

“Only after that official Coopting should the Comptroller of Statutory Corporations get involved in meetings and activities of those parastatals.”

She further directs that the Office of President and Cabinet should as a matter of urgency and as a matter of reform area provide for a clear policy and legal framework that will clearly define and give mandate to the office of the Comptroller of Statutory Corporations — giving a deadline of March 30, 2022.

The Ombudsman also nullifies the recruitment of Kulemela as Branch Manager as it was illegal and irregularI and she directs that he should immediately return to his previous post of Pharmacist in Charge.

“I engaged management of Central Medical Stores Trust and there is currently a vacancy on the position of Pharmacist in Charge such that Mr. David Kulemela will not find any challenges to revert to his old post.

“Central Medical Stores Trust management is hereby directed to take all necessary steps to effect the nullification. I direct Central Medical Stores Trust to fill the post of the Branch Manager in accordance with the applicable legal and policy framework — this should be done by 30th June, 2021.”

She also nullifies the government’s appointment of Joe Khalani Director of Pharmaceutical Operations Directors was illegal and irregular as this is the responsibility of the Board of Central Medical Stores Trust.

The Board is thus directed “to take all necessary steps to effect the nullification immediately” and she take cognizance that Khalani has served on the substantive post for almost a year now — however, this does not in any way regularize his appointment”.

“His appointment to the Director of Pharmaceutical Operations position was tainted right from the beginning and in total breach of the regulatory framework. It has to be treated as if it never existed.

“This is the only way public trust in Government administration can be regained and show that arbitrary actions like these made outside the regulatory framework are not sanctified.

“I direct the Board to make a new offer to Mr. Geoffrey Ngwira who was the successful candidate that the Board had appointed before the Department of Statutory Corporation hijacked the process resulting in a wrong authority making the offer.

“If Mr. Geoffrey Ngwira takes up the offer, then Mr. Khalani should revert to his old post of Warehousing Manager or any other managerial position as long as he has the right qualifications for the post.

“If Mr. Geoffrey Ngwira does not take the offer, then the Board should make an offer to Mr. Joe Khalani since he qualified and came up second in the interviews. In the latter scenario Mr. Joe Khalani’s effective date of employment will be the date that he accepts the offer by the Board.”

She directs that a report of the outcome of this process should be made available to her office by 30th May, 2021, saying it is her “hope that this report will help to bring sanity and orderliness in the way that parastatals handle their recruitment matters and also ensuring that they follow the existing laws and guiding frameworks all the time”.

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