There is an ongoing criminal trial involving former Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe, who is momentarily walking free on bail. Testimony from a former RBM internal lawyer who was also the Bank’s Secretary, Samuel Chilembwe Malitoni, Kabambe bulldozed the then Board of Directors to have the bank release K6.2 billion towards Covid-19 to the government, Shire Times has learnt.
According to Malitoni, his role stopped at the dummy cheque presentation ceremony at the Bingu International Convention Center (BICC) and “I am not aware of how the funds were actually transferred to the government and how it was utilised.” Malitoni made the statement (which Malawi Focus has seen) on 16 July 2021, almost a year after he retired from RBM on June 30, 2020.
He recalls that he was involved in securing the board resolution of the K6.2 billion Covid-19 by RB, adding that his participation, to the best of his knowledge, was that someday, he received a call from the then Deputy Governor responsible for Operations, Henry Mathanga.
“Mr. Henry Mathanga informed me, through a phone call, that the Governor, Dr. Dalitso Kabambe had instructed him [Mathanga] to prepare a board paper for the board’s approval that the bank should contribute K6.0 billion to the State President’s request or appeal from donors and institutions for financial support,” he said.
Malitoni said this followed the State President’s earlier declaration of a State of Disaster in Malawi in March 2020, due to the COVID-19 pandemic. According to Malitoni, a board paper was drafted by the Financial Markets Department and submitted by Mr. Rodrick Wiyo to his functional head, Mr. Mathanga. The basis of the donation, according to Malitoni, was stated in the paper to be two-fold: as part of RBM’s Corporate Social Responsibility (CSR) and also to minimise the COVID-19 impact on macroeconomic variables.
“I did reviewed the board paper as usual to ensure that it is consistent with RBM board papers’ format and released it to Mr. Mathanga and Dr.Dalitsio Kabambe for their final guidance before I released it to the bank members. Dr. Kabambe called me to say that we should add K200 million to the K6 billion RBM Covid-19 contribution national response so that the board paper should seek board approval of K6.2 billion,” he said.
Kabambe told Malitoni that the additional K200 million was meant to cater for the government’s administrative expenses, so that the K6 billion should not be partly used for the government’s administrative expenses. At this point, Malitoni said he amended the board paper, informed the Director of the Accounting and Finance Department of the amended amount and submitted it to the board directors.
However, Malitoni discloses in the statement that Kabambe had instructed that, given the urgency of the matter, the board needed not to physically meet but rather use what is known as round robin board approval.’ This is a technique for generating and developing ideas in a group brainstorming setting and it relies on an iterative process building off consecutive contributions by each participant, conducted in either written or verbal variations.
“It should be mentioned that the decision that I requested the round robin board approval came from Governor Kabambe, who said that the matter required an urgent board resolution, which should not have waited for a formal physical sitting of the RBM board,” said Malitoni.
The board, Malitoni said, unanimously approved the board paper on the same day, effectively empowering management to make the K6.2 billion donation. However, on the round robin format of board approval, Malitoni gives his own opinion in the statement, describing it as fast, but does not offer the directors ample time to interrogate the paper and make a more informed decision.” He also discloses that it was not the first time for the RBM board to use the round robin methodology to obtain a board resolution, as Kabambe had instructed him to use such a method “several times.”
Later, Malitoni said he was requested by Mr. Mbane Ngwira, who was the Director responsible for the Governor’s office and Public Relations, to arrange for one RBM board director to come to BICC to hand over, symbolically, the K6.2 billion Covid-19 impact mitigating funds to the Malawi government. He said he managed to secure the presence of the then director Pius Mulipa.
However, Malitono also recalled that on the day of the symbolic handover, it was discovered that the dummy cheque had some deficiencies. As such, Malitoni said the PR office had arranged for a new dummy cheque, but unfortunately, the cheque was not yet signed.
“As such, Mr. Mbane Ngwira signed it there and called me to append my signature on the other signatory space. This is how I found myself being part of the signatory of the K6.2 billion Covid-19 RBM contribution dummy cheque,” he said.
Apart from the suspicious RBM K6.2 billion donation, Kabambe is also answering alleged criminal charges related to the misreporting several times on Gross Reserve Assets (GRA) and Net International Reserves (NIR), for the period 2018 to 2019, while he was at the helm.
As a way of painting a rosy picture to the International Monetary Fund (IMF), on the status of the Extended Credit Facility, the DPP government, through RBM, sugarcoated figures, misreported the country’s foreign exchange position to portray a well performing economy.
