Zhuwao testifies against Mphwiyo over K2.4bn Cashgate: Defence queries ‘missing’ documents

Former Ministry of Finance budget director Paul Mphwiyo and 17 others on Monday appeared in court in Lilongwe with a senior government official telling the court that the suspects’ action in Cashgate—the plunder of resources at Capital Hill through dubious payments exposed in September 2013— led to the loss of aid.

Mphwiyo coming out of court

Some of the defence lawyers coming out of court

Francis Zhuwao, Director of Planning in the Ministry of Energy told the court that IMF and other donors withdrew direct budgetary support to Malawi because of the K2.4 looting of public money at Capitol Hill by Mphwiyo, former Accountant General (AG) David Kandoje and former deputy accountant general  Auzius Kazombo.

“The ordinary people, the poor suffered a lot when the donors withdrew aid,” Zhuwao told the court.

Zhuwao said he was Director of Economic Affairs in the Ministry of Finance when he noticed that domestic debt had gone up unjustifiable from around K180 billion to K240 billion.

“I informed the ST (secretary to Treasury) who immediately called for a meeting to find out what was happening,” he said.

He said the Secretary to Treasury wanted an immediate reconciliation process to find out how much was funded, printed cheques and cheques which were cashed.

Zhuwao said Mphwiyo and Kazombo attended the first meeting but were conspicuously missing in the second meeting which led to the cancellation of the meeting as the two were key persons for the reconciliation process of the books.

He told the court that he organized the meeting with Reserve Bank of Malawi official which took place on 9th September, 2013 to look ok reconciliation, which was chaired by Mrs Mercy Kumbatira from RBM, had l Mphwiyo, Kazombo from Accountant General Office who was also chair for Cash Management Committee.

“Reconciliation was to look at what has been funded, which cheques have been printed and which cheques have been cashed. It was at this meeting that Paul confirmed some numbers like MDF and tourism. I was suspicious because all along he was saying he was not aware of the numbers only to acknowledge some of them in the meeting,” Zhuwao told the court

Zhuwao told the court that the meeting resolved that first they get cheque images from RBM which were sent through the email and also agreed to continue with reconciliation and meet on 13th September, 2013.

“We were surprised that after agreeing and seeing the cheques images the two couldn’t make it to the meeting while RBM was there, this raised our suspicions that something was being done, we rescheduled the meeting to another date,” Zhuwao said.

He said another meeting could not take place because Mphwiyo was shot a night before the scheduled meeting.

Meanwhile,

Presiding High Court judge Esme Chombo had to order  questions  to be deferred following a misunderstanding between the State and defence legal teams over missing documents.

Titus Mvalo, lawyer representing the first accused Mphwiyo,  said  Director of Public Prosecutions (DPP) Mary Kachale  had not served him with three documents relating to his client’s case  which she had based her questions when Zuwawo made his testimony.

The documents in question are Treasury Funding Authority Books for the period July to September 2013, Integrated Financial Management Information System (Ifmis) Uploading Records for the same period and minutes of reconciliation meeting between the Reserve Bank of Malawi (RBM) and government team, including Mphwiyo.

Kachale told the court the prosecution already served the defence with the documents in question.

But Mvalo maintained that the said documents were critical to ensuring a fair trial and that it is also in the interest of justice and that the State should provide the defence with the documents to avoid suspicioun that the DPP was ambushing the defence with new documents altogether.

Hearing continues on Tuesday at Civic Offices in Lilongwe where the council chamber has been turned into a court room.

In the case, Mphwiyo and 17 others are charged with conspiracy to defraud government, holding property belonging to government, theft, money laundering, fraudulently issuing 24 cheques worth K2.4 billion, abuse of public office and usage of proceeds of crime.

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