Lutepo sues bank Over k663m deal

Cashgate prisoner and businessperson Osward Lutepo was yesterday back in the High Court in Blantyre where he is seeking damages from Standard Bank for alleged breach of contract.

Lutepo, who is serving 11 years of custodial sentence at Chichiri Prison, sued the bank for contractual disagreements emanating from a K663 million tender he won in 2013 through his International Procurement Services (IPS).

Through Civil Case Number 204 of 2015 filed at the High Court Commercial Division in Blantyre, Lutepo is claiming damages for breach of contract, damages of loss of profits, interest thereon at the contractual lending rate and costs of the action.

Trial of the matter was scheduled to start yesterday, but Judge Michael Mtambo adjourned the proceedings upon the bank’s request.

Stand-in counsel for Standard Bank, Louis Ulaya, asked the court to adjourn the case because the bank’s lawyer was sitting for examinations.

On his part, Lutepo’s lawyer Nickson Masiku said they had no objection to the adjournment because the reasons were valid.

“That is in order because the reasons were valid. If somebody is writing exams, there is nothing we can do, even the court understood,” said Masiku in an interview later.

Justice Mtambo then ordered that trial of the proceedings should continue on June 22 and 23 2017.

According to Lutepo’s statement of claim signed by his lawyers Russell, Smith and Associates, he was awarded a contract by Electricity Supply Corporation of Malawi (Escom) to supply line materials valued at K663 022 606.00.

In February 2013, he applied to Standard Bank for financing and allegedly complied with the conditions the bank gave which included furnishing the bank with the contract he had signed with Escom and also that he should make an undertaking to pay through the bank.

Lutepo claims the bank approved the agreement and undertook to finance his contract through payments to be made by means of 30 percent cash and 70 percent through Letters of Credit (LCs) arrangement.

“The plaintiff [Lutepo] ordered goods from various suppliers from overseas in order to honour its obligations towards Escom Limited. However, subsequent, thereto, the defendant [Standard Bank] paid 30% of what was agreed in cash to the suppliers.

“However, contrary to the said agreement and contrary to the contract between the plaintiff and defendant regarding the financing herein, the defendant failed to provide 70% Letters of Credit,” reads part of Lutepo’s statement of claim.

Further, he claims that the bank, without proper reasons, did not finalise payment to the foreign suppliers, forcing them to withhold the remaining part of the materials because he was unable to deliver the remaining part of the goods to Escom.

Lutepo also claims to have sent several reminders to the bank on the need to finalise the payment “but the defendant did not make the payments”, which made Escom terminate the contract.

“Escom Limited afforded the plaintiff several extensions within which to deliver the remaining goods, but the plaintiff was still unable to deliver the goods due to the defendant’s aforesaid conduct,” claims Lutepo in his statement.

Thus, the businessperson feels he suffered damage and loss of profit which he would have made if he supplied the line materials to Escom.

Lutepo was sentenced to 11 years imprisonment on September 4, 2015 by Judge Redson Kapindu of the High Court in Zomba for money laundering and conspiracy to defraud government.

He was the seventh person to be imprisoned on Cashgate-related charges since the trials began in February 2014 after the court found him guilty of siphoning K4.7 billion from government coffers. n