The High Court in Blantyre on Tuesday denied to release on bail a Pakistani national suspected to have defrauded local banks over K20 billion through loans facilities the company he worked for obtained.
Abdul Rehman Abdullah, a businessman and managing director of Cotton Ginners Africa Limited (CGAL) who allegedly fled to Pakistan after his company defaulted the loans repayments, returned to Malawi on September 18 this year after a warrant of arrest was issued against him.
Making the ruling following his bail application, judge Sylvester Kalembera said it was the findings of his court that Abdullah has dual nationality which is illegal in this country.
“Thus he owes his allegiance to his native Pakistan, where he had fled with his family. Thus, he is a foreigner, a Pakistani national. He returned to Malawi, leaving his family in Pakistan.
“He has no emotional or family ties in Malawi. Hence the fact that he returned to Malawi does not convince this court that he is not likely to flee again regardless of what conditions might be attached to his bail if he were to be released on bail… On that ground, I would deny [him] bail for being a flight risk,” Kalembera ruled.
The judge said Abdullah was also facing serious offences, and one of the offences, money laundering, attracts a maximum sentence of life imprisonment.
“It is also the finding of this court that the respondent (the banks involved) has established that it has a strong case against the applicant. Again, that would be enough incentive for the applicant to evade his trial,” Kalembera observed.
He ordered the prosecutors to bring Abdullah before the court on October 27 for plea and directions.
Abdullah had earlier on argued before the court through his lawyer Lusungu Gondwe that he had no intentions to evade trial, having returned to Malawi and handed himself over to police on his own.
He argued that he had a traceable place of residence in Limbe and he undertook to be reporting to any police office the court should have directed.
But CDH Investment Bank, which extended a loan to CGAL in 2015 cumulatively totalling about K1.8 billion and is being represented by private practice lawyer Meyer Chisanga, objected to the bail application.
The court learnt that when CDH Investment Bank tried to follow up on the repayment of the K1.7 billion balance and on possible realisation of securities, it was noted that CGAL was heavily undercapitalised such that it could not repay the debt and that it owed a lot of other financial institutions money beyond K20 billion.
The bank later learnt that Abdullah, who was their contact person and signatory to all loan documents, had allegedly fled the country.
His disappearance in April forced the remaining directors at CGAL to apply for bankruptcy at the Commercial Court in Blantyre as the company could not service the loans, an application the banks challenged.
The banks affected are Standard Bank Limited, Reserve Bank of Malawi’s Export Development Fund, Ecobank Malawi Limited, CDH Investment Bank and National Bank of Malawi.
The total amount at stake is K20 903 508 825, but it has also been established that the total liabilities for Cotton Ginners Africa Limited is K23 656 808 338, with the company’s total assets pegged at K10 011 666 092.
The company requires K13.2 billion to return to solvency, court documents we saw indicate.