LILONGWE-(MaraviPost)-The Reserve Bank of Malawi (RBM) Governor Wilson Banda has been summoned to appear before Malawi Parliament’s Public Accounts Committee (PAC) on Wednesday, May 4, 2022 at 2 pm on corrupt practices and abuse of office.

PAC has also summoned EDF Board Chairman Neil Nyirongo, Company Secretary Agnes Sentala and Tim De Borde, a member of the board of directors of Export Development Fund (EDF), subsidiary of the Reserve Bank of Malawi (RBM).

The committee’s chairperson Shadreck Namalomba confirmed the Maravi Post that RBM Governor Banda will indeed appear before PAC on serious corruption and abuse of office.

“What we want is for the governor to explain on alleged funds mismanagement, fraud on recruitment on unqualified auditor.

“Upon hearing his side of the story, the committee will report to the whole house with recommendation to appointing authority to act on him,” says Namalomba.

Wilson Banda summoned over office abuse at RBM

The summon follows letter written by concerned members of staff to the Chairperson of
PAC dated March 21, 2022.

According to the said letter, in September 2021, the three members of EDF Board hand-pickedHandsome M’bwana operating as Fletcher and Evance who is not licensed by the Regulator, Malawi Accountants Board (MAB) to provide auditing services at EDF without following a competitive bid process as required by the EDF procurement procedures.

EDF is a public institution and follows the provisions of the Public Procurement and Asset Disposal Act as well as Public Finance Management Act.

Borne of contention

EDF has since been swindled tax payers’ funds amounting to MK25 million by way of audit fees paid to Handsome M’bwana who is not licensed by the Regulator, Malawi Accountants Board (MAB) to provide auditing services in Malawi.

The Governor is also expected to explain why Neil Nyirongo and Agnes Sentala have been taking untitled fringe benefits, without even deducting income tax, from EDF on monthly basis comprising airtime and fuel.

This is contrary to the guidelines of benefits for the Board of Directors of EDF approved by the Shareholders meeting, the Annual General Meeting (AGM) of the years 2018, 2019 and even 2020 in the history of the Fund.

Sentala is a salaried employee of the Reserve Bank of Malawi and it is unlawful for such employee to take fringe benefits from both the Reserve Bank and its subsidiary EDF.

It is reported that no any other board chairperson or secretary has ever taken such fringe benefits since
establishment of EDF until July 2020 when Neil Nyirongo was appointed to the Board.

The probe

The RBM governor Banda is also expected to explain gross abuse of office and conflict of interest concerning Tim De Borde who, in his capacity as member of the Board of EDF, has been receiving tax free money in excess of MK20 million as commission for selling agricultural commodity on behalf of the EDF comprising sugar beans and white haricot beans despite the fact that other indigenous Malawians submitted their bids, at the same time, to buy the commodity for export markets.

The RBM Governor himself has been accused by his members of staff of lacking management and leadership skills as he is fond of telling lies according to the letter dated 18th January 2022 written to the Honorable Ombudsman.

The Governor lied under oath, as a public officer, when he was called to appear before the Public Appointments Committee on November 4 2021, defending fraudulent recruitment of Nsomba that it
followed the laid down procedures of RBM Group and its subsidiary EDF, while he was fully aware that in fact the recruitment was fraudulent.

The RBM Governor is also accused of failing to take decisive action against the EDF Board in his capacity as Shareholder due to serious conflict of interest.

Neil Nyirongo who is the current Board Chairman of EDF is said to be Banda’s home boy, long time close friend and former work mate at RBM.

According to the letter written by RBM members of staff to Anti-Corruption Bureau (ACB), it is reported that the conflict of interest between Governor Banda and Neil Nyirongo has caused serious tendencies of collusion on matters of recruitment and serious deficiencies of good corporate governance practices.

The Governor has been making attempts to appoint Neil Nyirongo as Managing Director of EDF when
Nsomba was being investigated by the office of Honorable Ombudsman.

This is against a proposal which was rejected by government, through the former line Minister of Finance, Honorable Felix Mlusu.

“We would have expected the Governor of RBM, Dr Wilson Banda and the Board of EDF to be above reproach in terms of morality in managing matters at EDF. The Reserve Bank Governor is supposed to have unquestionable integrity,” reads part of the summon letter.

When contacted for comment, an audit expert, who is an audit partner at one of the international audit firms in the country and holds ACFE designation with the Association of Certified Fraud Examiners, (South Africa), and spoke to our reporters on position of anonymity.

He told this publication that any appropriately qualified accountant would seek to be registered and licensed by MAB in the country.

“Those who are not registered by the Regulator, MAB in Malawi, are simply fraudsters as they do not meet eligibility criteria for practicing as an auditor in the country and any report issued by such auditors can be challenged in a court of law.

Appropriately qualified accountants cannot set up an audit firm and choose to provide only forensic audit services when there is a chance of providing other audit services and earn more revenue by being a licensed practicing accountant,” he says on condition anonymity.

He added, “In Malawi all the audit firms registered with MAB are capable of providing forensic audit services and therefore, it is not true that provision of the service is exclusive to a particular firm in the country”.

He said that it was disappointing to note that a public institution like EDF decided to engage undocumented firm and an accountant who does not possess practicing license with MAB to provide auditing services as there was a significant risk that taxpayers’ money might have been stolen.

“It is sad to note that reputation of a strategic institution under the Central Bank is greatly impaired because of carelessness of the Board of Directors. EDF should have done the right thing by hiring a licensed auditor and an audit firm registered with MAB,” he says.

He commended the PAC for moving swiftly on the matters.

The economic expert therefore urged the Committee not to condone malpractices by unscrupulous accountants, as such abuses are intended to undermine the Authority of Malawi Accountants Board which the then Society of Accountants in Malawi (SOCAM) before converting to the Institute of Chartered Accountants in Malawi (ICAM) already worked tirelessly to deal with, by establishing MAB and ICAM.

He described such unlicensed public practice as a sham.

“It is a requirement of the laws of the Republic of Malawi to have all accountants in the country registered with MAB through ICAM including student accountants.

“Procurement Experts at the Public Procurement and Disposal of Assets Authority (PPDA) have further punched holes indicating that the provisions of the Public Procurement and Disposal of Assets Act were not complied with by the EDF as the procurement was solicited by the Board of Directors instead of an Internal Procurement Committee which was not in line with the law,” he says.

He observes further, “A Board of Directors cannot solicit procurement, conduct evaluation and approve the same themselves. A corporate governance expert at Catholic University has described the development at the Reserve Bank of Malawi and its subsidiary Export Development Fund as act of adultery to good corporate governance principles”.

He therefore demanded that in line with the efforts of fighting corruption, RBM Governor Wilson Band together with the Board of Directors of EDF must be fired immediately to allow the ACB to carry out their investigations, fearing that such Board should be capable of interfering with investigations.

President Lazarus Chakwera appointed Banda after firing Dalitso Kabambe soon after assuming power in June 2020 the time Malawi economy was in a good note.

Kabambe was fired on political grounds two years before his contract was expired.

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