Injunction saves BP&P from MRA shut down
Blantyre Printing and Publishing (BP&P) was nearly closed by tax collecting body Malawi Revenue Authority (MRA) on Friday last week for failing to pay tax arrears amounting to almost K120 million but was saved by an injunction at the High Court.
MRA were ready to pounce on BP&P, which also own Blantyre newspapers Limited (BNL) which publishes four newspapers, until BP&P lawyers, Chisanga Tomoka & Company rushed to court on Friday afternoon to seek an injunction.
MRA wanted a Distraint Action (powers to enforce payment through sale of assets) on BP&P for failing to settle tax arrears amounting to K117, 109, 021.69.
Court documents in Nyasa Timespossession show that BP&P lawyers have now applied for a judicial review on the matter.
Documents in judicial review no 44 of 2011 indicate that the court is yet to set a date for the hearing of the case.
And in his affidavit in support of an application for a judicial review, BP&P Managing Director Leonnard Chikadya suspects that MRA has ‘ulterior motives’.
“I verily believe that the Respondent’s decision to demand full payment is unreasonable, unjustified, and unlawful and is actuated by bad faith and ulterior motives. It is unreasonable of the Respondent which is well aware of the Applicant’s precarious financial position to expect the applicant to pay the full amount of K117, 109, 021.69 within three days of demand,” said Chikadya.
Meanwhile, as a strategic move to avoid MRA impounding some of the property and vehicles, senior managers at BP&P have changed ownership of their official vehicles and register them in their names.
Sources at the Road Traffic Directorate in Blantyre confirmed that Chikadya changed the ownership of his official blue Mercdenz Benz Registration Number BP 1895, BNL General Manager Tikhala Chibwana now owns a Toyota Fortuner registration number BQ 4613 while BP&P Financial Controller Veronica Masikini has registered her official vehicle, a Toyota Fortuner BQ 4675 as hers.
The strategic moves to evade MRA also include re-allocation of offices. BNL has rented offices atMontfort Press in Limbe where computers have been assembled just in case MRA and Sheriffs come knocking on the door.
BNL subsidiary courier company, Times Courier, headed by Stella Hara have moved from BP&P offices at Ginnery Corner and are operating from Mpatsa House downtown Blantyre.
The source said if MRA come to confiscate cars and other property of Times Courier, they will not find anything.
Times Courier is one of the companies which is spinning money for the struggling printing giant.
The source said they were afraid that MRA may confiscate even clients’ goods which would be in transit and senior managers feared they would lose clients hence the move to Mpatsa house.
A close source said the decision to change ownership of the vehicles was done without consulting the board of directors and said if the shareholders of the company hear this they will be angry.
“This means that Chikadya and his senior managers, legally own the cars, they can decide to leave and no one will get the cars from them. It’s like they are now plundering the assets of the company,” said the source.
Another source from BNL corroborated the story and added that BP&P spends almost K10 million a month on three employees only.
“It’s not like these people don’t have the money, they do. The corporate office which houses Chikadya, Masikini, Chibwana and Legal Counsel Innocent Kalua spends more than K10 million a month on four people alone,” said the source.
The source said Chikadya get fuel allocation of more than K130, 000 per month while Masikini get about K120,000 worth of fuel. There are other benefits that only these four enjoy despite their hefty salaries. Chikadya takes home almost K3.5 million a month while Masikini earns K2.5 million a month and Chibwana gets K1.8 million a month. These people have money to pay MRA, they just don’t want to pay it,” said the source.
The source also disclosed that former finance minister Ken Kandodo has returned to the board of directors and has since started questioning some of the expenditures.
“But Chikadya is clever, he makes sure that all the board members are well looked after. This is what will sink this company,” said the source.
Chikadya could not comment as he was reportedly in a meeting with bank officials trying to get a loan to pay off the MRA debt.
Two months ago, Chikadya retrenched 44 employees with the aim of saving money to pay the MRA debt.
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