Clean on MRA scam—Lipenga

Retained Finance Minister Dr Ken Lipenga says his hands are clean on the MRA K15 billion loan scam, arguing he did not sanction the authority to borrow from commercial banks to beef up its performance last year.

Lipenga said this in a telephone interview on Wednesday in reaction to growing calls for his resignation from some quarters and accusations that he has no right to feign ignorance on the matter because his ministry was the final authority on such issues.

The calls followed Lipenga’s admission in Lilongwe on Tuesday that the Malawi Revenue Authority (MRA) borrowed K15 billion from the banks to paint a rosy picture of revenue collection for the hastily-implemented zero-deficit budget (ZDB) and show that it was on track.

ZDB was former president Bingu wa Mutharika’s brainchild towards economic independence after he fell out with donors and development partners due to governance concerns last year. Traditionally, donors support the country’s national budget with resources estimated at 40 percent.

‘My conscience is clear’

Lipenga said while everyone has the right to make their observations on the matter, his conscience is clear. He said MRA is better placed to state who authorised them to borrow money for the public coffers.

Said Lipenga: “I discovered over a period of time that the information I received from my officials was not entirely true. When I responded to the matter in Parliament, I did so on the basis and trust of the information I was furnished with by my officials.

“I had no reason to suspect [there were] discrepancies. However, when the matter was raised [in Parliament], I became suspicious and took the trouble to investigate. I never gave authority in writing or verbally.”

Calls for resignation

Human rights activist Billy Mayaya on Wednesday was among those who called for the resignation of Lipenga and MRA commissioner general Lloyd Muhara to pave way for investigations to ascertain the extent to which the previous administration went to mask the state of economic collapse.

Mayaya argued it is evident the law was breached as any loan to government must be approved by Parliament.

The Malawi Economic Justice Network (Mejn) also called for a probe into the matter so that the right action can be taken.

Mejn executive director Dalitso Kubalasa argued Lipenga’s confession is evidence that a lot of things were not working as they should have been under the late Mutharika.

Malawi Law Society (MLS) president John-Gift Mwakhwawa said they are considering several steps to be undertaken. He said the MLS is in the middle of a consultative process and will issue a statement when ready.

A private practice lawyer, who did not want to be named, argued that lying to Parliament and the nation is not a simple thing. The lawyer argued Lipenga should not pretend to be ignorant of the transactions as MRA would only get such a mandate from his ministry.

Said the lawyer: “For MRA to borrow, Parliament had to pass a loan authorisation bill. No such bill was passed. So, there was no sanction or authority from Parliament. This was illegal through and through.

“However, the question arises whether the minister was misled or practised wilful ignorance? There is no way MRA could have borrowed without the Secretary to the Treasury and the Ministry of Finance being aware. After all, who provided guarantee for the loans?”

The whistle was first blown in Parliament in February 2012 by Malawi Forum for Unity and Development (Mafunde) president George Nnensa who claimed he had evidence that MRA borrowed the money from the commercial banks.

And in a letter to Mwakhwawa dated May 1 2012, Nnensa, who is Balaka South MP, said MRA borrowed money from the Malawi Savings Bank (MSB), NBS Bank Limited, Standard Bank, the National Bank of Malawi (NBM) and Indebank Limited at the end of December last year and paid it back in January this year with interest.

He alleged that a motion from Karonga Nyungwe MP Khwauli Msiska to summon MRA and officials of the banks to present facts surrounding the matter was defeated by government MPs.

The late Mutharika told Parliament that domestic revenue amounted to about K120 billion against the midyear target of about K115 billion.

Nnensa stood by his statement and refused to withdraw it in a written communication to Speaker of Parliament Henry Chimunthu Banda.

He has meanwhile joined those who are asking Lipenga and some MRA officials to resign. Nnensa told Zodiak Broadcasting Station on Wednesday he will take the matter to court.