State drops charges against 4 suspected Reserve Bank of Malawi fraud

The State has dropped criminal charges against four central bankers  suspected to have connived with former Reserve Bank of Malawi (RBM) manager, Charles Ezra July Mchakulu and three others, to steal K340 million from the central bank.

Mchakulu, together with Lucy Rachel Sukali, Rebecca Martha Chisenga, Olivia Misozi Phiri, Neddie Khonje, Kondwani Cuthbert Banda, Elluby Mhango and Davie Mkhumbwa, were arrested on suspicion that they stole K340 million from the central bank last year.

The suspected fraud prompted RBM to team up with other government agencies, including the Financial Intelligence Authority (FIA) and the Fiscal Police, in an investigation into the missing bucks.

RBM spokesperson Mbane Ngwira said at the time that the fraud was discovered through a system of surveillance of transactions in the banking system.

“The suspected employee had been making unsupported transfers from a government ORT [other recurrent transactions] account to a stationery supplier, Ideal Stationery,” Ngwira said at the time.

The suspected fraud prompted FIA sources to obtain a freeze order with Mchakulu and Lucy Rachel Sukali trading as Ideal Stationery, whose account was used as a conduit to siphon money from the bank, as respondents.

Through the court order, which was obtained on June 12, 2019, FIA wanted to freeze a bank account at National Bank of Malawi Victoria Avenue Service Centre in Blantyre, which at the time the order was issued had a balance of K120 917  295.60 at the time.

The order, in civil case number 432 of 2019, further restrained residential property at plot number Area 6/137 and residential property number Area12/460.

RBM Governor Dalitso Kabambe indicated that the fraud was uncovered following an audit.

“We did an audit, we have concluded an audit and the results of that audit are what informed the developments,” said Kabambe.

But in a twist of events, the State has written the Resident Magistrate Court in Lilongwe, instructing it to withdraw the charges against Khonje, Banda, Mhango and Mkhumbwa.

“Having heard the State and having received a Certificate of Withdrawal, issued by the State Prosecutor, under Section 81 of the Criminal Procedure and Evidence Code; it is hereby ordered as follows: 1. That charges against Neddie Khonje, Kondwani Banda, Elluby Mhango and Davie Mkhumbwa has been withdrawn,” reads the order on withdrawal in part.

However, the order, which was made on Wednesday this week, emphasizes that this does not necessarily bar the State from recommencing or bringing new charges against the four on the same account of the same facts.

The case  against Mchakulu, Lucy Sukali, Rabecca Chisenga and Olivia Phiri will continue.

In recent years, corruption, embezzlement and fraud have hit many government ministries, departments and agencies (MDAs) in the country with various audit reports, newspaper and criminal investigations pointing to worsening of the vice.

Since the 2013 revelations of Cashgate, the plunder of public resources at Capital Hill through inflated invoices and payment for goods and services not rendered that drained K24 billion from public coffers over a randomly-chosen six-month period, financial scandals continue to be reported bordering on procurement, invoicing, contracting, allowance claims and kickbacks.