Parliament’s Public Accounts Committee (PAC) will from Saturday start investing a a K567 million interest payout controversy involving food supplier Pioneer Investments and Malawi Police Service (MPS), suspecting fraud with an arrest impending on the suppliers.
Nyasa Times first reported recently that the Auditor General Stevenson Kamphasa was “bulldozed” to authorise a payment to a company owned by filthy rich Asians, Pioneer Investment for 500 000 units of food rations it supplied to Police.
The company is claiming K567 million in interest for what it says was late payment from January 1, 2016 to June 30, 2017 for goods which were supplied to government after receiving advance payment.
The matter was later picked up by Weekend Nation newspaper and then Daily Times newspaper also followed it up.
Meanwhile, PAC chairperson Alekeni Menyani saidhis committe has summoned Inspector General (IG) of the Malawi Police Service (MPS), Lexten Kachama, and Treasury officials to explain.
The committee has also summoned Pioneer Investments managing director Zamir Karim to appear for questioning.
“You are ordered to come and appear before the Parliamentary Committee on Public Accounts at Parliament Building, to give evidence on the legitimacy of your interest claim totalling K567,866,013.38 for the delay in payment for the supply and delivery of rations packs to Malawi Police Service,” the letter reads of summoning in part.
The PAC chairperson said the payment controversy is “an indication of continued Cashgate (plunder of resources at Capital Hill).
The food supplier insists there is nothing wrong with their interest claim but Menyani said the committee feels Auditor General Stephenson Kamphasa was forced to authorise the payment for the 500,000 units of food rations that Pioneer Investments supplied to police.
The Treasury stopped the interest payment after the initial authorisation by the Auditor General, Attorney General and the police.
Menyani emphasised that Pac is doing all the probes in ministries, divisions, corporations and other independent and semi- autonomous bodies.
“My committee will do everything possible to probe and examine all queries in Auditor General’s reports, without fear or favour,” Menyani said.
Menyani faulted Minister of Finance, Economic Planning and Development Goodall Gondwe on the matter and urged graft-busting body, the Anti Corruption Bureau (ACB) to launch their own criminal investigations.
According to documents in possession of Nyasa Times, the company is claiming K567 million in interest for what it says was late payment from January 1, 2016 to June 30, 2017 for goods which were supplied to government after receiving advance payment.
Initially, the Auditor General rejected the claim on interest, according to a memo seen by Nyasa Times dated 12 September 2017 reference number Aud/conf/03 but there has been change of heart following political pressure.
According to the contract, the agreement was for K2.3 billion to deliver food rations within 20 weeks starting from the day the contract was signed.
The contract, which was for supply of corned beef, energy biscuits, energy juice and pilchards, has no specific interest clause.
Finance Minister Gondwe confirmed that after being asked to audit the interest payment query by Pioneer Investments, NAO initially authorised Treasury to pay the interest.
“That’s correct; the Auditor General first said ‘pay,’ and now they are saying ‘don’t pay’. We wrote the National Audit Office, after they said ‘pay them the interest,’ because—in our records—this company was paid in time and in full,” Gondwe said as quoted in the press.
According to Deputy Inspector General of Police Duncan Mwapasa , the Police advised Treasury not to pay the claim.
He also insisted that there was “no clause about paying the supplier interest if we delay to pay the sum”.
Pioneer Investment is run by a wealthy Malawian of Asian decent family of Zahir Karim accused of wielding undue influence through its links to Finance Minister Gondwe.
Like the notorious Guptas of South Africa, the Karim family is controlling some state affairs as the the Democratic Progressive Party (DPP) government continues to be facinf allegations of corruption amid a worsening unemploymentFollow and Subscribe Nyasa TV :