We want to condemn the fabrications that appeared in the Malawi News article of 12 March 2016 titled, “Trouble at Press.” This article has been designed to tarnish the image of Government and the DPP through their baseless allegations. Following our investigations, we have found out that it is the Senior Management at PCL that are behind this article. We have also established that it is in fact, the conduct and performance of some Senior Management themselves that have brought a mess at PCL, and not the presence of any DPP functionaries on the PCL Board.
Press Trust owns PCL and has several shareholders. When vacancies occur on the Board of Trustees, it is the remaining Trustees who appoint new Trustees to self-perpetuate the Board. It is also Trustees who appoint Members to the Board of PCL. The Board of Press Trust has always been more Malawi Congress Party (MCP) than any other party. It has certainly never been more DPP in orientation.
Currently, the Trustees include the MCP Treasurer General, Mr Tony Kandiero, and Hon Nancy Tembo, who is a former MCP Parliamentarian, as well as an MCP nominee on the Malawi Electoral Commission. Also on this Board are Dr George Kayambo and Mrs Chioko who are certainly not DPP sympathizers.
Mr Chidyaonga and Prof Peter Mwanza ceased to be Press Trustees after serving their maximum two terms of six years each. The question of overstaying therefore cannot arise. By law, the remaining Press Trustees, who are far from being DPP sympathizers, appointed their replacements, i.e., Mr Chisanga and Mr Chirwa. Under the same law, the same Board of Trustees appointed Mr Chidyaonga and Prof Mwanza to the PCL Board.
In these appointments, the Press Trustees followed the prescribed legal procedures and violated no law whatsoever. This Board of Trustees had no DPP Members when they made these appointments. Moreover, the DPP, or Government, by law, and in practice, have never had anything to do with appointments of Members to either of the two Boards.
The two new Trustees are not DPP functionaries or sympathizers. Prof Peter Mwanza, who was just appointed to the Board of PCL is no longer a DPP member. He joined the Peoples Party (PP) and was a Cabinet Minister after the death of Late Bingu. He has never returned to the DPP.
Therefore, the allegation that Prof Mwanza and Mr Chidyaonga participated in the decision to appoint the two new Trustees, and their own appointment is an outrageous fabrication. The news reporter was corrected in the same article by the Chief Executive Officer of Press Trust, but he ignored that fact. This is mediocre journalism and we condemn it wholeheartedly. Therefore, the suggestion that these current Board appointments are part of a DPP plot to snatch and control PCL as their financing instrument is an ill-conceived absurdity.
It is obvious that schemers of this article, i.e., the PCL Management, want, not only to tarnish DPP’s image, but also to mask their own rot in PCL. In this article, PCL Management have faulted DPP on governance. They have no moral mandate to do so. The appointment of the current Group Chief Executive (GCE) 14 years ago never went through Board interviews nor other proper legal channels. Despite serious reservations from Press Trustees at that time, he was just hand-picked by the then President and imposed on the Board as the GCE of PCL. He has had three times three-year contracts and a final five-year contract approved by the Board. This is against good corporate governance as we know it.
This time, he asked for an 18-month extension on top of the above four contracts. He then participated in the discussions and decision to grant this 18-month extension. This is illegal and unacceptable. Fortunately, the Trustees reduced this extension to nine months. Thus, both his appointment 14 years ago and the irregular extension of his contract now have been troublesome “illegalities.”
In May 2014, this GCE signed an internal Memo alleging that the Board had approved a car allowance of MK6, 312, 572 every month for himself. In the same Memo, he indicated car allowances for other officers as follows:
(a) Exco – MK4,708,446
(b) General Managers – MK3,351,109
(c) Senior Managers – MK2,610,743
(d) Other Managers – MK1,993,772
There is no Board Meeting whose Minutes can confirm approvals for such car allowances. These finance manoeuvres are therefore not just obscene, but are also illegal and criminal conduct. Fortunately, the Trustees have put a stop to these immoral and callous allowances. We also hear that there are some clandestine interviews going on, some even at night, to seek and prepare friends or relatives for high positions in PCL. We want to make sure that this illegality and rot must stop.
During his tenure, the GCE closed eleven (11) Press companies. These were:
1. Press Poultry
2. Central Poultry
3. Hardware and General Dealers
4. Press Furniture and Joinery
5. Enterprise Containers
6. Malawi Pharmacies Limited
7. McConnell and Company
8. Tambala Food Products
9. Press Bakeries
10. Press Transport, and
11. PGI Industries
This was totally against the spirit and wishes of the founder of PCL, i.e., the Late Ngwazi Dr Hastings Kamuzu Banda. We all remember how he wanted PCL to stimulate economic activity throughout Malawi. He wanted it to be a fountain of employment and a source of training for Malawian management skills. Obviously, the GCE has completely destroyed the intended character of PCL.
The GCE promised to replace these closed companies with new and more vibrant companies, in his view. However, he has totally failed in several projects in that regard. These include:
1. Tourism Cape Maclear Resort
2. Energy-Solar and Hydropower
3. PCL Head Office at Top Mandala
4. PTC Zambia Operations
5. Chapima Heights Residential Project
6. Ethanol Flex Vehicles
7. Maldeco Expansion (new fishing vessel disaster)
The current remaining units of PCL include the following, some of which have problems or outstanding issues:
1. National Bank
2. TNM Ltd
3. Ethanol Company
4. PUMA Energy Ltd and
5. MacSteel Ltd
6. BBGL Carlsberg Malawi Ltd (PCL lost majority shareholding)
7. Press Properties (there are so many uncertainties)
8. Maldeco (technically insolvent)
9. Press Cane Ltd (ownership battle in court)
10. MTL (technically insolvent)
11. PTC (technically insolvent)
Only the top five have no problems, but the bottom six have one major challenge or other. Some of them are technically insolvent, while others have legal ownership challenges.
Recently the GCE lied about the closing of twenty PTC Shops. He claimed that he was bypassed by the PTC Board in this process. The fact, however, is that he pushed the PCL Board Members for a speedy decision to close these shops. This further destroyed the true intended service nature of these shops which were all being run most profitably before.
The revelations of this information have compelled Government, as a Majority Shareholder, to seek some information from PCL Management. This was done in a letter from the Attorney General, through the CEO of Press Trust. The requested information included:
(a) Executive packages for top Management in the last five years.
(b) Bonus payments paid to top Management in the past five years.
(c) The Dividend Payment Policy. The Policy requires that 35% of profits after tax should be paid to shareholders. However, Management has been paying only 16% or less.
(d) Explanation on how Government shareholding was diluted from 49% to 44.45%. We understand that this dilution of peoples’ shareholding in PCL came as a result of a very poor Management decision.
It is now six months after this request was sent but no response has come. The shareholders are now concerned. They are worried about what other irregularities or criminal activities are being hidden by the PCL Management. We want to know why all these companies were sold and how so many new proposed companies failed. In addition, there are stories of billions of Kwacha missing from PTC, Carlsberg and elsewhere in the group. We demand forensic audits done in those companies.
The list of alleged irregularities and illegal activities is a long one. PCL’s reluctance to provide the requested information is even more suspicious. Government is now forced to demand an urgent Shareholders meeting to assess the extent of the mismanagement and start taking remedial measures.
It is therefore very sad and totally unacceptable that with all this rot at PCL, the Senior Management is trying to manufacture “DPP gurus” on the PCL and Press Trust Boards as well as an alleged DPP scheme to snatch PCL away from other shareholders.
JAPPIE MHANGO MP
MINISTER OF INFORMATION, TOURISM AND CIVIC EDUCATION
GOVERNMENT SPOKESPERSON
