Seven law firms and a contractor named in the Reserve Bank of Malawi (RBM) forensic audit report as having received what auditors described as “suspicious payments” totalling K2.8 billion have questioned the credibility of the audit.
Representatives of some of the law firms we interviewed yesterday said they filed valid court settlements that prompted government to make the payments to their respective firms.
In the forensic audit report compiled by Deloitte into alleged fraudulent local and foreign payments made by RBM between January 1 2019 and June 30 2020, the auditors claimed that the office of the Attorney General failed to provide documents in support of the payments by the time the audit report was concluded.
But in separate interviews yesterday, the law firms argued that the auditors did not make an attempt to hear their side of the story before publishing the audit.
The listed law firms include Kalekeni Kaphale Lawyers of former Attorney General Kalekeni Kaphale which received K133.8 million, Tembenu, Masumbu & Partners where former minister of Justice Samuel Tembenu is a partner which received K110 million and Nampota & Company which got the highest payment of K2 billion.
The list also includes Mundikhumbengi Building Contractors which recieved K274.6 million payment, Joe and Max Chambers which got K200.7 million and D Salima and Company which got K125 million payment.
According to the audit report, Deloitte claims to have sought in vain to establish whether the compensations were paid to valid entities or whether there were any unsupported or inflated miscellaneous payments made for ministries, departments and agencies (MDAs), including legal costs, court awards and settlements.
The account, also known as Compensation and Refunds-Statutory Expenditure account, is used to settle claims against the government.
In an interview yesterday, Tembenu said his law firm had a genuine court consent for the payment under Civil Cause Number 321 of 2017.
He said: “As I said, I haven’t read the report and cannot comment intelligently on the allegations nor the motive thereof. However, we are surprised that the auditors did not request this information from us.”
On his part, Kaphale questioned the credibility of the audit finding, saying his law firm and several others named were not granted any opportunity to explain themselves.
He said: “My law firm and other law firms were never ever asked. I asked the law firm and they said those are clients’ money. They are emanating from court judgements.
“Government doesn’t just pay people. There should be a paper trail and RBM must have paid based on such papers.”
Former Anti-Corruption Bureau director Alexious Nampota, a lead partner in Nampota & Company, could not be reached for comment on several attempts. The audit report, whose copy The Nation has seen, also includes details of how RBM officials allegedly bypassed own rules and regulations to authorise several “suspicious” payments, issue letters of credit to companies without any due diligence, procured contracts against procurement laws, paid a local bank suspicious sums of money, all at a huge cost to the taxpayer.