Malawi: Attorney General Silungwe Move to Challenge K3bn Payout to Mulli

30 October 2020

Attorney General Dr Chikosa Silungwe on Wednesday appeared before Malawi Supreme Court if Appeal judge Frank Kapanda to amend notice of appeal in a case where the previous regime awarded payment of K3 billion compensation to Leston Mulli-owned firms for the damages the companies claim to have suffered during the July 20 2011 demonstrations.

The payment to Sunrise Pharmaceuticals and Chombe Food Limited--companies under Mulli Brothers Holdings Limited (MBHL)--was authorised on April 13 2018 by former Attorney General Charles Chidongondo Mhango on behalf of the Malawi Government.

But Silungwe is challenging the payment when government is failing to collect K4.9 billion in loans that Mulli-owned companies obtained from the defunct State-controlled Malawi Savings Bank (MSB).

Silungwe want to appeal against the decision of the registrar of the High Court and Supreme Court made in October 2014.

However, lawyer Tamando Chokoto representing Mulli argued that the application by Silungwe was irregular because "it was actually an application to appeal out of time."

He said matters are supposed to be appealed within six weeks after a court decision and that the Mulli ruling was made six year ago.

However, private practice lawyer Bright Theu questioned the payment and the conduct of the former Attorney General on the matter.

He described the payment as "dubious" and "questionable."

Said Theu: "I think the decision to pay the amount is dubious, in the sense of questionable. The Release Agreement under which the sums were paid clearly acknowledges that it is a mere compromise and not an acknowledgement of liability on government's part. So, among others, what tantalised the [then] Honourable Attorney General to compromise? His office lodged an appeal, which the Supreme Court found to be arguable and to have reasonable prospects of success.

"That appeal was pending at the time of the compromise. It probably is still pending, though the same Attorney General may not be expected to pursue it having paid out under the dubious compromise."

He also described as unreasonable government's failure to offset Mulli's MSB loans through payments government owe MBHL, arguing the State's business relations with Mulli "smacks of zero probity and is on its face a scandalous betrayal of the public trust."

MBHL is the largest beneficiary of the K6 billion toxic loans government took over from MSB, a then wholly State-owned commercial bank, sold in July 2015 to FDH Financial Holdings Limited.

Mulli obtained K4.9 billion from the bank while other firms owed over K660 million.

After government set up the special recovery vehicle to collect the K6 billion, no single tambala has been recovered.

According to a senior Justice Ministry official, the K3 billion compensation payment could have been stopped on the premise of Mulli's K6 billion debt.

More From: Nyasa Times

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