A former risk and compliance manager fighting his dismissal in court has been hit with a staggering K145 million counterclaim, after his ex-employer accused him of serious oversight failures that left the institution exposed to financial risk.
Harmony Mwavuli, who served as Risk and Compliance Manager at the Malawi Enterprise Development Fund (MEDF), is challenging his sacking at the Industrial Relations Court in Lilongwe - but the case has taken a dramatic turn after MEDF fired back with a counterclaim of its own, worth K144,966,078.
The fund, represented by Khonyongwa & Associates, filed an Amended Statement of Reply and Counterclaim dated 10 August 2026, transforming what began as a straightforward employment dispute into a potentially ruinous financial battle for the sacked executive.
Mwavuli, who worked at MEDF's Head Office in Lilongwe's City Centre, was dismissed following disciplinary proceedings connected to his role in implementing the fund's Micro Irrigation and Farm Implements Loan (MIFIL) Programme - a decision he is now disputing in court.
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But rather than simply defending the dismissal, MEDF has gone on the offensive, alleging that Mwavuli failed to fulfil duties that were fundamental to his senior role, including providing effective risk oversight, ensuring regulatory compliance, and safeguarding the fund's internal procurement controls.
According to court papers, these failures allegedly played out during the implementation of the MIFIL programme, particularly around procurement activities that MEDF says raised serious compliance red flags.
Among the most damaging allegations is that Mwavuli was directly copied on an Audit Advisory Report flagging concerns over procurement procedures - yet failed to take any effective corrective action despite being alerted to the problems.
MEDF argues this failure to act sits at the heart of its case, insisting the dismissal was not an arbitrary decision but the culmination of genuine concerns over Mwavuli's performance in a role specifically designed to protect the institution from exactly this kind of risk.
Adding further complexity to the case, MEDF has also raised a jurisdictional objection linked to a separate ongoing matter - Harmony Mwavuli and 12 Others v. National Economic Empowerment Fund - involving Mwavuli and twelve other employees placed on administrative leave, arguing the overlapping proceedings raise questions over duplication that the court will need to resolve.
But it is the eye-watering sum of money at stake that has transformed this into one of the most closely watched employment cases currently before Malawi's courts.
Rather than simply seeking to have Mwavuli's challenge dismissed, MEDF is attempting to turn the tables entirely, asking the court to hold him personally financially liable for losses the fund attributes directly to the procurement failures at the centre of the original disciplinary proceedings.
If MEDF succeeds, Mwavuli could find himself facing a financial liability running into hundreds of millions of kwacha - a staggering reversal of fortune for a man who began this legal battle simply trying to get his job back.
MEDF is additionally seeking to recover any outstanding employee loans directly from Mwavuli's terminal benefits, arguing such deductions are necessary to protect the institution from further financial exposure.
The case is set to place MEDF's procurement systems, internal audit processes and risk-management structures under intense judicial scrutiny, while the court simultaneously examines whether Mwavuli's conduct amounted to genuine misconduct justifying dismissal, and whether the disciplinary process itself complied with employment law.
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Key evidence expected to feature prominently in proceedings includes transcripts from a disciplinary hearing held in July, along with the formal dismissal letter dated 20 July 2026.
The amended reply has been formally served on Mwavuli's legal team at Albaart Chambers, with the case registered as Matter No. IRC 347 of 2026 now placing two starkly contrasting narratives before the court: Mwavuli's claim that his dismissal was unlawful, against MEDF's counter-argument that his conduct in a role entrusted with protecting the institution from risk directly contributed to losses of almost K145 million.
For now, the serious allegations contained within MEDF's amended statement remain contested claims that have not been proven in court, with the Industrial Relations Court set to determine the competing claims as the case progresses.
