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Govt, Kabambe tussle over K1bn

The Office of the President and Cabinet (OPC) and Reserve Bank of Malawi (RBM) are tussling with former central bank governor Dalitso Kabambe over his K1 billion pay out claim and vowed to defend the matter in court.

Following his removal by President Lazarus Chakwera in July 2020, Kabambe, who was appointed to head the central bank by former president Peter Mutharika in April 2017, filed a K1 billion claim as terminal benefits and breach of contract. He had nine months and 16 days remaining on his RBM contract at the time he was replaced with Wilson Banda.

Demanding K1 billion in terminal benefits: Kabambe

But in an interview on Monday, Attorney General  (AG)Chikosa Silungwe, whose office provided a legal opinion on the matter to the OPC, said government will reject the claim.

He said: “First and foremost, the issue of legal opinion is not something I can discuss in the media, but I can confirm that Dr Kabambe has indicated he will sue government. We are within the notice period. The K1 billion will not be paid and if it goes to court, the lawsuit will be defended.”

Silungwe said that Kabambe, through his lawyers, is yet to file the said lawsuit in court, but wrote his office to demand the payment or risk lawsuit.

He said: “We are still within those 90 days prescribed to us to make the payment or risk being sued. Let me repeat, we will not make the payment and if there is a lawsuit, it will be defended in court.”

Kabambe could not be reached through his mobile phone on several attempts while Marshal Chilenga, one of the lawyers representing him, on Monday refused to speak on the matter, saying: “He [Kabambe] has given me instructions to represent him on the case, but not speak to the media.”

Silungwe: The K1 billion will not be paid

Government argues that Kabambe was appointed RBM governor on secondment from mainstream civil service where he worked at OPC; hence, he is not entitled to the payout. The government contends that Kabambe will have to resume his civil service career following desecondment from RBM.

But Kabambe, who was last week inducted into frontline politics as a member of the former governing Democratic Progressive Party (DPP), said in a television interview with privately-owned Zodiak Broadcasting Station last week that he would not go back to the OPC, hinting the move was political.

In an e-mailed response to a questionnaire, RBM spokesperson Onelie Nkuna also confirmed that the central bank received the demand for payout from Kabambe through his lawyers. She also indicated that Kabambe’s five-year contract stipulated that he will be entitled to payment of salary if he was fired.

She said: “With regard to the employment contract that Dr Kabambe signed with the Malawi Government, it was stated that where termination of the contract was not due to the fault of the governor, he will be paid all his salary and benefits up to the end of the contract as compensation for the termination.

“The Reserve Bank of Malawi will, therefore, await guidance regarding the contractual issues from the Malawi Government as the appointing authority and contracting party.”

Nkuna also confirmed that RBM received a letter dated April 21 2017 which stated that Kabambe was on secondment to the central bank from the civil service.

She said: “The letter further stated that the appointment was in line with the provisions of the Malawi Public Service Regulations relating to secondment.

“Later, the Reserve Bank of Malawi received a letter dated 17th July 2020 which stated that government had decided to de-second Dr Kabambe from the Reserve Bank of Malawi, with immediate effect.”

Kabambe recently came into the limelight following revelations that he hiked his salary as governor from K8 million per month at the time of his appointment in April 2017 to around K27 million per month when he left office.

The governor of RBM also chairs the institution’s board which, among other things, determines remuneration for the governor, directors and other members of executive management.

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