MSB, Mulli differ on assets value
Wholly State-owned Malawi Savings Bank (MSB) and Mulli Brothers Limited (MBL) Holdings have given different values for MBL Holdings’ properties up for sale by the bank to recover an outstanding loan of about K3.3 billion (US$7.3 million).
Mid last month, MSB advertised MBL Holdings’ properties valued at K3 319 538 600 (US$7.4 million in total and invited interested persons to submit their bids.
But two weeks ago, the Malawi Supreme Court of Appeal gave the two parties 14 days to individually re-evaluate the properties after the conglomerate obtained an interim injunction restraining the bank from advertising or selling the properties which were used as collateral.
However, in their evaluation reports submitted to presiding appeal judge Dunstan Mwaungulu in his chamber on Thursday, the two came up with substantially different totals.
For its part, MBL Holdings valued its properties at about K6 billion (US$13.3 million) while the bank’s valuers put them at K4 billion (US$8.9 million).
In an interview Thursday, Judiciary spokesperson Mlenga Mvula confirmed the variations in the evaluations of MBL Holdings’ assets yesterday, saying the matter will now be resolved by the judge.
Mvula said having heard arguments from both parties in his chamber; Mwaungulu would make his ruling on the matter on July 9 2015.
He said: “The appellants and respondents brought before the court their evaluation reports on the assets which the judge will have to consider. They also presented their arguments and after the interpartes hearing the judge will deliver his ruling after 21 days from today [yesterday].”
Mvula also said besides the evaluation reports, the judge will consider other issues the two parties advanced before the court.
He said: “He [judge] will also consider other arguments the appellants and respondents presented to him before exercising his discretion whether to continue the injunction that was granted previously or vacate it.”
On June 4 2015, Mwaungulu ordered a fresh evaluation of the properties after using parts one, two and three of the Civil Procedure Rules 1998, which give judges powers to exercise intelligence or judicial knowledge to seek more information from the concerned parties in the case.
According to Mvula, the idea was to enable the judge to exercise his powers intelligently and justly before determining whether the properties are worth the loan MBL obtained from MSB or are higher or lower than what the bank is owed.
MBL Holdings is appealing against the decision of the High Court’s Commercial Division for MSB to proceed with the selling of the properties to recover its debt from the company.
After the properties were put up for sale, MBL sought an exparte injunction, which was granted on May 26 2015 stopping MSB senior management, including chief executive officer Ian Bonongwe, head of credit George Sibale, company secretary VideliaMluwira and head of corporate banking Ted Chanza from disposing the assets.
Over the years, MSB and MBL Holdings have been engaged in a dispute over the loan amount recovery.
Government, the sole shareholder in MSB, has put the bank up for sale in a bid to recapitalise it to meet regulatory requirements in terms of capital in line with Basel II.
In April this year, the Ministry of Finance, Economic Planning and Development instructed the Reserve Bank of Malawi (RBM) to issue K6 billion worth of promissory notes to replace toxic assets or loans owned by several businesses, including MBL, to shore up the MSB balance sheet.
However, the decision was interpreted by many observers as a bail-out package for politically linked businesses.
President Peter Mutharika has since ordered a suspension of the sale of MSB to allow more public debate on the issue.
