The High Court of Malawi has allowed Mapeto David Whitehead and Sons (DWS) Limited officials access to bank accounts the Financial Intelligence Authority (FIA) froze in relation to the alleged tax evasion case against the company.
Mapeto DWS and its senior executives Martin Chapasi Mpata, Abdul Rashid Bakali and Mohammed Gaffar filed an application before High Court Judge Jack N’riva asking the court for an order to vary a freezing directive FIA issued on May 26 2021 against their respective bank accounts.
The freezing of the bank accounts followed a Malawi Revenue Authority (MRA) direction to FIA to monitor and analyse the bank accounts associated with the applicants on suspicion of abuse of the Industrial Rebate Scheme (IRS).
The scheme gives duty and excise waivers to local manufacturers to import new materials and add at least 25 percent value to them to produce a totally different material, ready for consumption.
But MRA is reported to have discovered that DWS was importing already finished products and passing them as raw materials which they were going to add value and produce different products to benefit from the duty and excise waiver.
This is what prompted FIA to freeze the accounts.
But in their application, their lawyers Jai Banda, Clement Mwala and Fostino Maere told the court they wanted access some funds to make some payments.
In his ruling, N’riva, who cited authorities from the Malawi Supreme Court of Appeal, observed that at the time of the freezing order or at the time of its extension, one may apply to the court to vary the order to meet general living and legal expenses.
He said: “This is based on the constitutional principles surrounding the administration of criminal justice. The principle is also based on the constitutional tenets such as the right to access justice and the right to effective legal remedies.”
N’riva proceeded to grant the application to vary the freezing directive.
The judge further ordered that so long as FIA is holding the applicants’ sums of money, within the prescribed time and, if at all, the period is extended, they should be able to release such sums to enable the applicants meet their living and legal standards.
He also ordered that the payments should be made not later than three days of the order made on July 12.
On May 23, MRA pounced on Mapeto DWS Limited and arrested five senior officials, including Mapeto DWS director Faizal Gaffar Latif, for multiple cases of alleged tax evasion which then was estimated at K10.8 billion, but was later revised upwards to about K16.5 billion after further investigations.
The accused persons also include two MRA customs officers George Mwaluka and Tsepiso Kaunda. They are all on bail.