The Anti-Corruption Bureau (ACB) on Tuesday said it pounced on Chief Executive Officer (CEO) of CDH Investment Bank, Misheck Esau, in relation to a case of suspected dubious transactions in the K2.7 billion Malawi Police Service (MPS) food rations deal involving businessperson Zameer Karim of Pioneer Investments.
The case follows a leaked ACB investigations dossier which established that a police undertaking and commitment to CDH Investment Bank to facilitate a loan to Pioneer Investments that MPS would pay for the businessperson was fraudulent.
ACB spokesperson Egritta Ndala said in a statement seen by Nyasa Times that Esau has been arrested for "omitting to conduct due diligence and monitor the business relationship and the transactions of Pioneer Investments with CDH Investment Bank."
According to the ACB statement the bank boss is likely to be charged with "consipiracy" which is contrary to Section 35 as read with Section 25B of the Corrupt Practices Act.
Esau will also face a charge of "influencing the use of public office for advantage" which is contrary to Section 25B (2) of the Corrupt Practises Act and "money laundering" contrary to Section 42 (1) (c) of the Financial Crimes Act.
ACB already arrested and charged Karim and police commissioner Innocent Bottoman and senior superintendent Grant Kachingwe in relation to the case.
Karim of Pioneer Investments is facing three counts of theft of K466 million contrary to Section 278 of the Penal Code, uttering a false document presented to CDH Investment Bank to access a loan contrary to sections 356 and 360 of the Penal Code and acquiring proceeds of crime (K466 million) contrary to Section 42 (1) of the Financial Crimes Act.
On the other hand, Bottoman is accused of uttering false documents which the magistrate said he presented to CDH Investment Bank to enable Karim's firm, Pioneer Investments, to access a loan.
Bottoman is also accused of abuse of office contrary to Section 25 (b)(1) of the Corrupt Practices Act (CPA) while serving as director of finance at MPS headquarters.
He is alleged to have unilaterally made an undertaking and commitment to CDH Investment Bank to facilitate a loan to Pioneer Investments and that MPS would pay for the businessperson. He is also accused of acquiring proceeds of crime amounting to K466 million.
Kachingwe's charge is one of forging a document which allowed Karim to access the said loan.
ACB investigations dossier established that the signature of a co-signatory on Bottoman's letter to CDH Investment Bank, Bottoman's deputy Tadius Samveka, was forged.
The investigation showed that on July 16 2015, Bottoman and Karim made an additional undertaking to the bank that MPS would remit over K2.1 billion to the bank, as a guarantee for Karim to borrow a similar amount from the bank.
Bottoman made both guarantees to Karim before the contract was awarded on August 4 2015, contrary to Malawi's procurement laws.
The investigation report also showed that after getting his payment on April 12 2016, the following day, Karim deposited K145 million into a Democratic Progressive Party (DPP) account at Standard Bank whose sole signatory is President Peter Mutharika.
But ACB cleared Mutharika, saying he did not personally benefit from the transaction. DPP later pledged to refund the money to Pioneer Investments.