central bank

LILONGWE-(MaraviPost)-The Reserve Bank of Malawi (RBM) has filed a defence in the Industrial Relations Court (IRC) against a MK2.389 billion unfair dismissal claim by its former governor, Dalitso Kabambe.

Among others, in a defence filed on April 14 by RBM lawyers Thabo Chakaka Nyirenda and Agnes Sentala, the central bank denies that Kabambe is entitled to salary and benefits amounting to MK2,389,198,829.64 as pleaded in his application and demands that he proves it.

The defence says Kabambe’s secondment to RBM was governed by the Malawi Public Service Regulations and the Malawi Public Service Administrative Circular No 15 Ref No PD/4/1/7E/VI/8.

RBM, which is the first respondent in the case, notes that the circular provides that the maximum period for secondment of any civil servant should be 36 months and argues that the contract that provided for Kabambe’s employment as governor for five years was invalid.

The central bank further argues that since following the secondment and or the appointment as its governor, Kabambe did not resign from the civil service, he continued to be a civil servant under normal terms of secondment.

“The 1st Respondent avers that under the conditions of employment governing the applicant and the Malawi Government, the Malawi Government reserved the right to recall the applicant from his secondment at any point before the expiry of 36 months.

“The 1st Respondent pleads that pursuant to the conditions of employment governing the Malawi Government and the applicant, the Malawi Government recalled the applicant from the Reserve Bank of Malawi by de-seconding him from the Reserve Bank of Malawi,” reads part of the defence.

RBM has accused Kabambe of misusing or abusing public office by disregarding audit recommendations on salary increment with respect to executive management.

The former RBM boss is also being accused of increasing benefits to executive management contrary to the RBM laid down internal procedures, thereby breaching section 25 of the Corrupt Practices Act and section 95 of the Penal Code.

“The 1st Respondent refers to paragraph 5 (xvii) of the statement of claim and pleads that since the applicant never retired from employment, he is not entitled to any retirement benefits from the period 1997 to 1st April 2017,” the defence further reads.

RBM has also accused Kabambe of supervising an irregular donation of MK6.2 billion to the Department of Disaster Management Affairs towards the Covid-19 response in March last year.

According to the defence, RBM is claiming the reimbursement of income unjustly earned by Kabambe as well as the sum of MK6.2 billion being compensation for loss that the central bank incurred as a result of the irregular donation towards the Covid response.

Kabambe served as Malawi central bank governor from 2017 till 2020 soon after Lazarus Chakwera took reigns of power from Peter Mutharika of Democratic Progressive Party (DPP).

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