Tuesday, October 4, 2022
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AHL K20 BILLION THEFT, RETRENCHMENT PLOT AND TEARS THAT FOLLOWED

The cost of entertained rubble

On Tuesday, 14th September 2021, the Malawi Police Services (MPS) greeted the nation with a news update that it had arrested three senior officials from Malawi Leaf Company Limited, a subsidiary of Auction Holdings Limited (AHL) and one businessman on suspicions that they conspired and stole over K20 billion from the company.

The arrested officials included Jimmy Kasamale, from Phalombe, who was working as General Manager of the Malawi Leaf Company; Francis Madona, from Chiradzulu, who was working as Financial Controller for the company; and Evans Matabwa, from Thyolo, who was working as Chief Executive Officer for the company. The businessman who was arrested along these officials is named Arthur Madikhula also from Phalombe District.

Phalombe, Chiradzulo and Thyolo are Districts in the Southern region. The former President of the Republic of Malawi, Professor Arthur Peter Mutharika, who originated from Thyolo District was well-known for putting people of his tribe and region in big positions both in government parastatals and the mainline civil service.

The most unsettling tragedy is that job competence and qualification were second considerations after tribal alignment. There are stubborn speculations that those handpicked into such positions executed a looting scheme in which public money was syphoned and channeled to the affairs of their political party (the DPP) and its politburo.

As regards the looting that occurred at AHL Group Limited, the company incurred a loss of K48.8 billion in 2017. In addition, the company’s liabilities suppressed its assets by K36.2 billion in the same year. Out of these figures, over K20 billion is established to have been looted by the arrested suspects.

The company was largely operating on loans obtained both locally and externally. From the local sources, AHL has been borrowing from FDH Bank, National Bank and CDH Bank. The major lender, however has been the external institutions such as Trade and Development Bank (TDB). In 2017, the company entered discussions with its main lender, TDB, for a loan facility structure whose repayment period would be between seven to ten years. During the initial of such discussions, the TDB put forward a key condition requiring the company to make significant bullet payment to reduce its loan exposure.

AHL committed to be paying about K1.7 billion on a quarterly basis. In an effort to raise funds for such payments, ADMARC, another parastatal that has suffered massive looting under DPP regime, was ordered to donate K6 billion to AHL as a bailout package, a directive which was complied with.

The AHL then committed to restructure itself. However, the economic restructuring agenda proved difficult since money was already looted. As a result, in February this year, AHL Group management resolved to retrench 61% of its 787 staff members and close four companies in the next two months due to financial challenges. This decision was preferred in order to alarm government which is already bearing pressure to create 1 million jobs that were promised during campaign period. Call it rubble impact. This move prompted President Chakwera to direct an investigation into the retrenchment saga, an exercise that has unearthed details of plunder that has necessitated these arrests.

Editor In-Chief
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