Mutharika faces calls to resign over Malawi Savings Bank ‘mafia-like’ sale

President Peter Mutharika faced calls to resign after being criticised by lawmakers and civil society activist over the controversial circumstances government has sold Malawi Savings Bank to FDH Financial Holdings of Thom Mpinganjira at K9.5bn ($21.1 million).

Opposition lawmakers have accused the Peter Mutharika administration of total disregard of the people’s position of transparency and accountability in handling issues of national importance.

“I am concerned because the people’s representation in the House and what they recommend doesn’t matter,” said leader of opposition in parliament Lazarus Chakwera.

Chakwera, who is also Malawi Congress Party (MCP) president, said he was “disappointed” with “lack of transparency in the whole saga.”

Peoples Party (PP) Rumphi East parliamentarian Kamlepo Kalua accused government for bulldozing the MSB sale without adhering to legal provisions.

“Government has clearly violated our constitution in selling this bank to one bidder, the procurement act clearly stipulates that you cannot sell to one bidder and in that event only FDH Holdings was the only bidder, government needed to re advertise the MSB sale so that at least there is competition of the required not less than three bidders”, said Kalua.

The sentiments received a loud applause from opposition benches and Kalua went ahead to demand answers from Finance Minister Gondwe.

However, Gondwe was at pains to explain the matter and his response was characterized by serious stammering and he maintained that all necessary procedures were followed.

“President suspended the sale but this suspension was not open ended. It was intended to enable people to consult and put views across and on the basis of which government was going to sit down and make a decision, and this has been done,” he said.

MCP Spokesperson on Finance in parliament Alexander Kusamba Dzonzi accused Gondwe for lying to parliamentarians and demanded the Finance Minister to immediately resign over the matter.

“As MCP we demand that honourable Minister of Finance must resign for lying to us, yesterday he told us that the decision to sale the bank was not yet made, worse still he has violated parliamentary procedures after parliament yesterday passed a resolution not to sale the bank and today we are told the bank is sold, he has cheating us”, said Dzonzi.

But Gondwe hit back saying President Mutharika through constitutional powers conferred in him endorsed the sale of the bank hence he was not wrong to warrant opposition demands for his resignation.

“I cannot resign, all procedures have properly been followed, consultations have been made, yesterday I told this house that I had no final say but the president and I explained that I was also waiting for presidential decision, so I do not see anything wrong with the decision, the president has spoken and its final”, said Gondwe.

This comes months after disagreements among Malawians on whether to sale the bank or not amid reported several vested interests from the ruling elite.

Some section of the civil society organizations held demonstrations against the sale of the bank saying being a public asset, Malawians will lose out.

The most worrying development to Malawians has been the “mafia-like” operation within government circles on the bank transactions to sale it has been conducted.

The fierce critic of the Democratic Progressive Party (DPP) regime who is also social commentator, Billy Mayaya has asked President Mutharika to resign immediately following the way how the President has handled the bank transactions.

Mayaya said apart from asking President Mutharika to resign, he is also wants Minister of Finance Goodall Gondwe, Ministry of Trade and Industry, Joseph Mwanamveka to quit for presiding over the controversial sale of the bank.

“Civic society would like to demand the immediate resignation of President Mutharika, Mwanamveka Goodall Gondwe for presiding over the illegal sale of MSB. They deliberately plotted to deceive the Malawi nation by suggesting that there were consultations endorsing the sale.

“I am on record that we demanded that the sale of MSB only proceed after the bank has been recapitalised after three years and thereafter be sold through an Initial Public Offering on Malawi Stock Exchange,” said Mayaya.

Mayaya further stated that Malawians were under the impression that the DPP had reformed after its poor record of human rights and government in the past but noted that they are “fixated on tribal politics meant to benefit the Lhomwe belt and exclude the rest of the country.”

He said: “Malawians are watching; though the wheels of justice and truth turn slowly, they turn all the same.”
Minister of Information, Tourism and Culture Kondwani Nankhumwa said Mutharika, Mwanamveka and Gondwe cannot resign from their respective positions because the bank has been sold following the competitive bidding process as required by law. Of course there was only one bidder and it was all evident government wanted its wholly-owned bank to be sold on a song to Mpinganjira’s FDH.

Nankhumwa said he was surprised to hear Mayaya uttering the statement and yet he was one of the people whom government consulted over the deal.

He said Government has created a Special Purpose Vehicle, an entity made up of prominent Malawians, to deal with bad debts relating to MSB.

“Government is pleased that the ownership of the MSB and INDE Bank respectively will remain in the hands of Malawian companies,” he said.

 The National Bank of Malawi has bought 75% of Inde Bank therefore making it the strategic owner with the remaining 25% left for the government. Previously government owned 100% shares of Inde Bank which has branches of its services in the country.

“The public may wish to be informed that part of the ownership of FDH Holdings is Old Mutual which is listed on the Malawi Stock Exchange (MSE).

“NBM is also listed on the same, this means all Malawians that have shares on the MSE will be participating as owners of the banks. In other words, the banks have essentially been sold to the public.

“This development augurs well with the Government’s policy of empowering local investors as Malawi prepares for large scale investment as evident in the multi-billion expressions of interest recorded in the Malawi Investment Forum we just had”, said Nankhumwa.

Meanwhile, MSB workers express fear of job cuts following the FDH takeover.

But Mpinganjira parried away the fears, saying they will maintain the work force and ensure to grow.

“We cannot start closing banks and networks. We want to utilise the network of Malawi Savings Bank to reach out to rural areas. We will take it to Malawi Stock Exchange,” said Mpinganjira.

Government finalized the sale of Malawi Savings Bank (MSB) on Thursday 2 July, 2015 at the price of K9.5bn ($21.1 million) despite heavy resistance from the Parliament.

Malawi government now holds only 25% shares in MSB while FDH Holdings has 75%.

Mutharika said in a statement that government has sold the banks after listening to public debate and based on powers conferred on him by the Constitution.

Reports indicate MSB posted a pre-tax profit of K2.5 billion (US$6 million) between January and May 2015.–Additional reporting by Zawadi Chilunga, Nyasa Times

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