The Public Accounts Committee of Parliament (PAC) has summoned Governor of the Reserve Bank of Malawi (RBM), Dr. Wilson Banda, to appear before it tomorrow, May 3, 2022, to either incriminate or exonerate himself from corruption and gross abuse of office allegations.
The meeting is scheduled for 2pm at the Parliament Building on Wednesday.
Nyasa Times understands that the Committee has summoned Banda in relation to corrupt practices and abuse of office by the Export Development Fund (EDF) Board Chairman, Neil Nyirongo, Company Secretary Agnes Sentala and Tim De Borde, who is a member of the Board of Directors at EDF.
EDF is subsidiary of RBM. According to the letter, in September 2021, the three members of EDF Board handpicked Handsome M’bwana, operating as Fletcher and Evance, who is said to be not licensed by the regulator, Malawi Accountants Board (MAB) to provide auditing services at EDF without following a competitive bid process as required by the EDF procurement procedures. EDF is a public institution and follows the provisions of the Public Procurement and Asset Disposal Act as well as Public Finance Management Act.
The informants said following this decision, EDF has since been swindled taxpayers’ funds amounting to K25 million by way of audit fees paid to M’bwana.
“The Governor is also expected to explain why Neil Nyirongo and Agnes Sentala have been taking unentitled fringe benefits, without even deducting income tax, from EDF on monthly basis comprising airtime and fuel contrary to the guidelines of benefits for the Board of Directors of EDF approved by the Shareholders meeting, the Annual General Meeting (AGM) of the years 2018, 2019 and even 2020 in the history of the Fund.
“Agnes Sentala is a salaried employee of the Reserve Bank of Malawi and it is unlawful for such employee to take fringe benefits from both the Reserve Bank and its subsidiary EDF. It is reported that no any other board chairperson or secretary has ever taken such fringe benefits since establishment of EDF until July 2020 when Neil Nyirongo was appointed to the Board,” reads part of the letter in Nyasa Times possession.
It adds that Dr Banda is also expected to explain gross abuse of office and conflict of interest concerning Tim De Borde who, in his capacity as member of the Board of EDF, has been receiving tax free money in excess of K20 million as commission for selling agricultural commodity on behalf of the EDF comprising sugar beans and white haricot beans despite the fact that other indigenous Malawians submitted their bids, at the same time, to buy the commodity for export markets.
The RBM Governor himself has been accused by his members of staff of lacking management and leadership skills as he is fond of telling lies according to the letter dated 18th January 2022 written to the Honorable Ombudsman.
The Governor is accused of lying under oath, as a public officer, when he was called to appear before the Public Appointments Committee on 4th November 2021, defending fraudulent recruitment of Nsomba that it followed the laid down procedures of RBM Group and its subsidiary EDF, while he was fully aware that in fact the recruitment was fraudulent.
“The RBM Governor is also accused of failing to take decisive action against the EDF Board in his capacity as Shareholder due to serious conflict of interest. Neil Nyirongo who is the current Board Chairman of EDF is said to be Banda’s home boy, long time close friend and former work mate at RBM. According to the letter written by RBM members of staff to Anti-Corruption Bureau (ACB), it is reported that the conflict of interest between Dr Wilson Banda and Neil Nyirongo has caused serious tendencies of collusion on matters of recruitment and serious deficiencies of good corporate governance practices. The Governor has been making attempts to appoint Neil Nyirongo as Managing Director of EDF when Nsomba was being investigated by the office of Honorable Ombudsman, a proposal which was rejected by government, through the former line Minister of Finance, Honorable Felix Mlusu.
“We would have expected the Governor of RBM, Dr Wilson Banda and the Board of EDF to be above reproach in terms of morality in managing matters at EDF. The Reserve Bank Governor is supposed to have unquestionable integrity. It is therefore not surprising to see the mess being created by the Governor and his board chair friend. It is indeed clear that Dr Wilson Banda in his capacity both as Governor of the Reserve Bank of Malawi and indeed Shareholder of EDF lacks the RBM vision under which the RBM created EDF to form part of the National Export Strategy (NES) in the country for the benefit of ordinary Malawians,” say the informants.
South Africa-based audit expert said it was disappointing to note that a public institution like EDF decided to engage undocumented firm and an accountant who does not possess practicing license with MAB to provide auditing services as there was a significant risk that taxpayers’ money might have been stolen.
“t is sad to note that reputation of a strategic institution under the Central Bank is greatly impaired because of carelessness of the Board of Directors. EDF should have done the right thing by hiring a licensed auditor and an audit firm registered with MAB,” he said while seeking anonymity.
He, however, commended PAC for moving swiftly on the matters. He urged the Committee not to condone malpractices by unscrupulous accountants as such abuses are intended to undermine the Authority of Malawi Accountants Board, which the then Society of Accountants in Malawi (SOCAM) before converting to the Institute of Chartered Accountants in Malawi (ICAM) already worked tirelessly to deal with, by establishing MAB and ICAM.
He described such unlicensed public practice as a sham. It is a requirement of the laws of the Republic of Malawi to have all accountants in the country registered with MAB through ICAM including student accountants.Follow and Subscribe Nyasa TV :