Jet was ‘bartered’, Malawi got no tambala from the deal
The murky details surrounding the controversial sale of the presidential jet have finally come to light and it has become clear that military equipment supplier Paramount Group duped the Malawi Government by bidding for the plane for $14.5 million through its subsidiary Bohnox Enterprises knowing they would not pay Malawi a tambala.
Malawi’s Finance Minister Maxwell Mkwezalamba was on Wednesday at pains to explain the secrecy surrounding the sale, which was finalised on July 29 2013, but government had not come out with the truth until now.
The Office of the President and Cabinet (OPC), which facilitated the sale of the jet, has admitted that it was not aware that Bohnox Enterprises was part of Paramount Group until later in the deal and only after Bohnox Enterprises disclosed this fact.
During a news conference in Lilongwe last evening, Mkwezalamba confirmed that the $15 million (about K6.3 billion) never went into government’s consolidated account and instead the Attorney General facilitated the transfer of the funds from Bohnox Enterprises, which bought the jet, to Paramount Group, its mother company.
Said Mkwezalamba: “Government owed Paramount Group $19.2 million [about K8.2 billion] in respect of military equipment procured sometime back. Government cash flow could not meet the demand for payment of the equipment. So, it was agreed that Bohnox Enterprises clear the amount with Paramount Group.”
With government’s plans on how to spend the proceeds shattered, Cabinet decided to reallocate funds meant for procurement of military equipment from Paramount Group for peacekeeping missions to procurement of maize and drugs.
“There was a budget provision [for Malawi Defence Forces (MDF)] to clear the arrears with Paramount Group. Part of the amount was reallocated to cover arrears as per Cabinet directive.
“There was no cover up at all. If it had not been for arrears, proceeds would have gone into Account Number One and all transactions would have gone as planned,” Mkwezalamba explained.
Contrary to President Joyce Banda’s remarks, no funds from the proceeds of the sale were allocated to the Farm Input Loan Programme (Filp) and only less than $4 million (about K1.6 billion) has been spent on drugs, as the money was reallocated from MDF towards these transactions.
Minister of Defence Ken Kandodo explained that Malawi had to buy military equipment for United Nations (UN) peacekeeping missions which is reimbursed using a formula worked out by the UN.
But Kandodo failed to explain when exactly the MDF equipment was purchased and delivered.
Mkwezalamba said $7.3 million which was expected to be spent on military equipment for peacekeeping missions as Cabinet agreed went straight from Bohnox Enterprises to Paramount Group.
On the planned spending of $4 million for drugs, Mkwezalamba said so far, K1.5 billion has been spent as agreed by Cabinet, as a reallocation from MDF to the drugs budget, which totals K6 billion as approved in the 2013/14 national budget.
Mkwezalamba said all scepticism about the process used would be made official in the Mid-Term Budget or the 2014/15 national budget.
Meanwhile, government still owes Paramount Group $4 million in arrears after it subtracted $15 million from the sale of the jet.
Don’t believe everything you read or hear, these are just more lies. The agreed sale amount was more than US$14 mita, the extra was pocketed by Joyce Hilda Mtila-Banda and her son Geoff. But assuming it was sold for $14m and we know the third hand patrol boats cost $8, it means Joyce and her son got out with a minimum of $6m which they deposited into their accounts in the Cayman Islands.
Hilida wadya wani!!!!!!!
I doubt this is the last version of the story we will hear.
Yes Malawians we have been fools for sometime now but we can not continue to be such. Parliament, PAC, CSOs and others what we need are procedures. We want tender advertisements calling for the supply of the maize, drugs etc. And again we hear that the jet was deliberately sold at below its disposable value. Why? And what prompted the who paid for the boats, the maize, the drugs, and millitary equipment. What support documentation does Malawi have on all these
Government has been nothing but honest about the sale of the jet. Government also never lied about the sale either. People with ulterior motives came up with all sorts of allegations to put president Joyce Banda in a bad light. It won’t take her overnight to fix the damage that was caused by the DPP government but she is doing it and she needs our support.
Joe Chirwa, JB sycophant, pops up even on foreign websites.
Where I don’t understand is, am told part of the money
1. was paid to Paramount group,bought medicine, maize etc
2. after making all these buying and repaying of the debt, so You mean there not even 1 Million MWK remaining which could have being deposited into Account No.1?
3. Malawians would love to know what was agreed repayment terms and conditions of the debt Our government owned Paramount group, why did few individuals opted to abandon agreed term of the then deal by giving them our jet money.
4. Did the parliament approve all these transaction surrounding the jet proceeds, if not why did our government went on with all this?
The government of Malawi has mastered the culture of non payment to its suppliers and have just met their match. Chiradzulu hospital owes my Malawian partner for the last four years. Tell me if that is normal and they expect suppliers to treat them with respect? If you don’t have money why procure? In fact i would encourage anyone wanting to do business in Malawi to stay away from Government departments. they are bad news. My question is if you do this to small businesses which are the main drivers of economy, how do you expect a country to grow? If you do business with Malawi govt departments expect that you will be asked to pay a bribe for a payment cheque to be written . This is an entrenched culture in many business circles in Malawi.Let me tell you if you are looking for serious investors they will never touch down At KIA we will attract mafia type of investors who will never make our country grow. I hope somebody is listening.