Chakwera suspends RBM deputy governor

President Lazarus Chakwera has suspended Reserve Bank of Malawi (RBM) deputy governor Henry Mathanga over allegations of financial misconduct, but Mathanga has argued that he already resigned, effectively rendering the suspension void.

 In a letter to Mathanga dated June 24 2021, Chakwera states that he has suspended him in connection with a forensic audit report on RBM payment operations released last month. In it, the audit firm Deloitte exposed multi billion kwacha suspicious transactions. 

It reads in part: “I am in receipt of the audit report on the Reserve Bank of Malawi Payment Operations…The report exposes malpractices that may have been perpetrated by you in the course of your duties at the Reserve Bank of Malawi.”

The report led to the arrest of Mathanga, former governor Dalitso Kabambe and other RBM employees. They have since been released on bail.

Chakwera, in the letter, further states he was suspending the deputy governor on full pay as a committee was investigating Mathanga’s misconduct.

“Pursuant to powers conferred on me under Section 11 (1) of the Reserve Bank of Malawi Act, I will proceed to constitute a committee to enquire into the information which I have received and determine if any of the grounds listed under Section 10 (2) of the Reserve Bank of Malawi Act (2018) have been breached.

“Meanwhile, you are suspended with immediate effect on full pay until completion of the enquiry by the committee. The suspension is in line with Section 11 (3) of the Reserve Bank of Malawi Act. It is my hope that you shall cooperate with the committee of enquiry.”

But in his response through a letter dated June 25 2021, Mathanga argues that the law that empowers the President to enforce suspension does not apply to him.

He writes back: “I am in receipt of Your Excellency’s letter suspending me from the Reserve Bank of Malawi…You may wish to know, Your Excellency, that in the letter dated 25th March 2021,  and submitted to OPC [Office of President and Cabinet] through RBM on  26th March 2021, I resigned from the Reserve Bank of Malawi.

“In this regard your Excellency, I am of the considered view that Sections (1) and (3) of the Reserve Bank of Malawi, do not apply to me.”

Mathanga in his resignation letter, which we have seen, said the government was in breach of contract having reduced his K18 million salary by half and refused to allocate him an official vehicle.

The letter reads in part: “I would like to tender my resignation from the position of deputy Reserve Bank governor with immediate effect on the basis that I have been constructively dismissed.

“I have come to this conclusion  after a pattern  of events that, in my strong view, clearly renders the Reserve Bank of Malawi or the Malawi Government  as my employer, in serious and fundamental breach  of the contract  of employment to the extent that the working relationship  between myself and the employer is no longer tenable.”

Meanwhile, Minister of Information Gospel Kazako has said Mathanga’s resignation was not accepted.

In a written response to our questionnaire, the minister said the Department of Human Resource Management and Development (DHRMD) will respond to Mathanga soon.

Said Kazako: “His resignation is yet to be accepted by the Department of Human Resource Management and Development. As the responsible department, they are looking at his resignation [letter] and they will respond soon.”

However, in an interview on Friday, DHRMD spokesperson Ken Ntonga said his department was not handling Mathanga’s employment issue.

 He said: “DHRMD was not involved in the management of this contract; hence, RBM governor or board chairperson would be the right person to provide the needed clarification.”

 Meanwhile, private practice lawyers Shepher Mumba and Jai Banda have said even if the government did not accept his resignation, it cannot claim that Mathanga was still RBM deputy governor and therefore open to suspension.

 Said Banda: “If he was sent on forced leave and later he resigned and served notice, then he cannot be suspended. The argument that government had not responded to his resignation letter can’t hold water.”

 In an interview on Thursday, Mumba also said Mathanga’s contract was effectively terminated when he resigned.

“If he really tendered his resignation letter to his employers, it means his contract was effectively terminated. What remains now is to look at the terms of the contract and whether he was entitled to something or the employers were entitled to anything or not,” he said.

Mumba suspected that the President might not have been aware that Mathanga had resigned when suspending him.

He explained: “If the President has written him a letter of suspension, it means that possibly the President was not aware of his resignation. Otherwise, he could just have proceeded to constitute a team of investigators to investigate what Mr Mathanga did while he was working with RBM.

“My view is if the investigations lead to some elements of criminality, Mr Mathanga would still be liable although he is no longer an employee.”

Mathanga joined RBM 36 years ago and held a couple of positions before rising to the position of deputy governor last year having signed a five-year contract.

However, after the Tonse Alliance administration came to power, it technically suspended him after forcing him to go on leave for well over seven months before he resigned.

Mathanga joined RBM 36 years ago and rose through the ranks to become deputy governor last year, having signed a five-year contract.