MEra board has rendered itself susceptible to lawsuits for firing two of its managers who implemented its resolution to release K2.9 billion for the purchase of maize in 2016, labour experts have warned.
“The board made a decision which they tasked management to implement,” argues Mauya Msuku, a labour law lecturer at Chancellor College in Zomba.
“At that point, they saw nothing wrong with the transaction until it backfired. Then the board decided to pin the blame on the senior managers, sacking them in the process to save the face of the organisation. In my view, the two have sufficient grounds to sue their former employer.
“There remains the question of substantive justice as to who should take the blame in this matter between the decision-maker and the implementer. But in all fairness, the two were used as scapegoats for the board’s corporate mistake,” he said.
Msuku, in a telephone interview on Wednesday, faulted the board and described its decision as an application of “double standards”.
Said Msuku: “From an employment point of view, the board’s impartiality is hereby being seriously put to question.
But the new Mera board chairperson Bishop Joseph Bvumbwe defended the board’s decision, saying management initiated the idea of diverting money from the Price Stabilisation Fund (PSF) to purchase maize and only used the board to approve the release of the funds.
Bvumbwe said the board made the resolution on condition that management would follow procedures before releasing the money, but management did not follow them.
Said Bvumbwe: “There is clear background that management sought the approval of the board. The board gave the approval with serious conditions such as that management should liaise with all relevant organs of the government before releasing the money. It was, however, discovered that management did not follow this.
“So, in a nutshell, the whole process was faulty. The decision might have been wrong, but there are authorities who appoint the board who can bring the board to account on its actions,” he said.
Another labour relations expert who asked not to be named said both the board and management were wrong in the way they handled the matter.
“They share responsibility over this matter even if the funds were to be recovered. Board has to be questioned by the appointing authority which is the presidency and the ministry responsible,” he said in a telephone interview on Wednesday.
The board, he said, should have been guided by management not to stray from corporate governance principles.
“In terms of corporate governance, if a board makes a decision, management has to implement that decision. However, we should also realise that board decisions usually are motivated by a paper from management. What we learnt from the press is that the chairperson just e-mailed fellow board members to approve the decision by round lobbying which was copied to management.
“At that point if management was prudent enough, they should have advised the board if what the board was suggesting was against the policies and regulations of the organisation,” said the expert.
Bvumbwe defends board
Bvumbwe, who replaced Dingiswayo Jere, under whose chairmanship the resolution was made said that as a new chair the information he has is that it was management that initiated the issue.
Meanwhile, President Peter Mutharika maintained the Mera board despite its role in the transaction.
But Finance Minister Goodall Gondwe who in April this year said Treasury did not approve the transaction on Thursday told the Weekend Nation in a telephone Treasury he will only act on the matter after getting a formal report from Mera.
“As far as we are concerned, we are yet to get a formal report which can help us shape opinion over the matter. As soon as that information is formally given to me, I will report it and we will see what we can do. I have to get the perspective from the chairperson of the board,” he said.
In February 2017, the Mera board fired chief executive officer (CEO) Ralph Kamoto and director of finance Elias Hausi for alleged abuse of office when the authority used K2.9 billion from the PSF to buy 10 000 metric tonnes of maize for the Agricultural Development and Marketing Corporation (Admarc) to sell in its markets.
In an interview with our sister paper The Nation three weeks ago, Hausi said he would appeal the board’s decision to fire him.
Last week Bvumbwe announced in a statement published in the media that Mera has asked Admarc to refund the money.
Admarc chairperson James Masumbu said in an interview on Tuesday he has asked management to prepare a comprehensive paper on the issue to be presented during the board’s next meeting.
Said Masumbu: “This should be a full report on how much we owe Mera and how much has already been paid back. This will give us an idea on how we are going to work out the payments.”
A National Audit Office (NAO) report, Weekend Nation has seen shows that Mera procured the 10 000 metric tonnes of maize which was sent to Admarc for sale but Admarc only paid K250 million.
The audit report found that Admarc made a “casual approach to Mera by agreeing to remit the funds only to come up with unwarranted claims of handling costs which were not agreed upon,” reads part of the report.
According to other documents we have seen such as emails of board resolutions, internal memos and parts of the audit by the National Audit Office (NAO), the resolution to provide Admarc with money to procure maize was originated by the then Mera chairperson Dingiswayo Jere.
The email correspondence we have seen is first dated February 24 2016 with Jere writing to directors whose subject was “Board Resolution-Maize drought”.
The email started with an impassioned appeal for support of the resolution from Jere.
“Directors, I forward the attached for your endorsement so that we can support our brothers and sisters suffering from hunger now. I want accountability … that Admarc be requested to remit to Mera the money realised from the sale of this maize and the board will decide its way forward,” reads the e-mails. n