Parliament’s Public Accounts Committee (PAC) suspects fraud in a K567 million interest payout controversy involving food supplier Pioneer Investments and Malawi Police Service (MPS), saying it will investigate the matter.
PAC chairperson Alekeni Menyani said this after 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 after Nyasa Times reported that Police and National Audit Office were changing tones on the payment demand by Pioneer Investment.
Menyani has since said his committee will summon Pioneer Investments managing director Zamir Karim, Auditor General and Police Inspector General to investigate the payment claims which he noted points to possible fraud.
The PAC chairperson said the payment controversy is “an indication of continued Cashgate (plunder of resources at Capital Hill).
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”.
But Pioneer managing director Zamir Karim, insisted the demand for payment of interest was legitimate and accused police of a breach of contract.Follow and Subscribe Nyasa TV :