The Anti-Corruption Bureau (ACB) has cleared foreign-owned
companies, alleged by the Baker Tilly report to have benefited from K24 billion ($40,580,600) Cashgate, saying their case would not be linked to Cashgate because payments were made after delivery of services.
The two companies—Rummage Pace and Top Prima, who are linked to same shareholders, were named by the Baker Tilly report as the biggest beneficiaries—receiving a total amount of K12 billion ($20,290,300).
The bureau, however, says it is continuing investigating the two companies over other possible breaches of the Corrupt Practices Act, including potential overpricing of contracts.
The development comes months after Weekend Nation reported that ACB had not yet acted on the two companies which allegedly received a huge chunk of the Cashgate money.
But in an e-mail response, ACB spokesperson Egritta Ndala said after months of probing the companies’ contracts with government, the bureau has established the existence of valid contracts and fulfilled delivery of services.
She dismissed the assertions that the bureau was shielding anyone from prosecution, urging public patience as some cases are difficult to investigate and prosecute.
Ndala said the bureau has been unable to share more details on some cases due to sensitivities surrounding such investigations.
“The Anti-Corruption Bureau (ACB) has continued to investigate cases that were identified in the Baker Tilly Report and other cases which the ACB has been following up from own leads and investigations.
“Though most cases which were identified in the report are commonly and generally referred by the public and journalists as Cashgate, we usually refer to Cashgate as those cases in which payments were made by government but without delivery of goods and services.
“These types of cases and where we have moved quickly by proving that payments were made without valid contracts and delivery of the corresponding goods or services. Most of the people who have been arrested and charged and convicted have been in respect to such cases.
She explained that the Baker Tilly Report was based on a number of payments which government made under its review period and identified Rummage Pace and Top Prima as two companies that had received significant payments related to contracts with Malawi Defence Force (MDF) and Malawi Police Service (MPS).
Ndala said investigators have traced delivery notes and goods that were ordered and delivered.
She, however, insisted the companies are not off the hook yet saying, “Over pricing of goods and services potentially may indicate existence of corruption but only if a connection or money trail is identified between the suppliers and public who were part of such transaction. Our investigations so far have not made such conclusions.”
The Baker Tilly Report said at least 14 payments were issued to two businesses called Top Prima and Rummage Pace—companies associated with a person identified as Anil Lalwani and suggested this was Cashgate.
In one appendix to the report, the audit firm named Lalwani the biggest beneficiary of Cashgate followed by convict Oswald Lutepo, former politician-cum businessperson.
The report then said Rummage Pace could not be traced but between 23 October 2012 and 21 August 2013, the company received at least K5 billion through Foreign Currency Transfers but further alleged no ODPP documents could be traced.
The report says the companies were used to procure arms for MDF and the deal was approved by Cabinet ministers. n