Police in Blantyre have arrested Cotton Ginners Africa Limited (Cgal) board chairperson Mahomed Farook Ibrahim on suspicion of playing a part in the alleged defrauding of K20.9 billion from commercial banks through loans.
Malawi Police Service head of Fiscal and Fraud Section Isaac Norman said in an interview yesterday that Ibrahim, a British of Indian origin, was arrested last Friday.
He said Ibrahim has been jointly charged with the first suspect, Pakistani Abdul Rehman, who was arrested last week upon arrival at Chileka International Airport in Blantyre.
Rehman, one of the directors at Cgal, left Malawi for his homeland in June amid the bank fraud allegations.
Said Norman: “Mahomed Farook Ibrahim was arrested on Friday for the very same criminal offences of Abdul Rehman. We have charged them with theft, fraud and money laundering offences, but I don’t want to go into details. So, I won’t discuss anything beyond that.”
The two businesspersons are accused of defrauding various local commercial banks of K20.9 billion through loans obtained in the name of Cotton Ginners Africa Limited.
Court documents indicate that the major victim of the suspected fraud is Standard Bank Limited which is owed K8.6 billion followed by Reserve Bank of Malawi’s Export Development Fund which is owed about K4.1 billion.
Ecobank Malawi Limited facilitated a K3 499 481 627 loan, CDH Investment Bank is owed K4 476 302 691 while National Bank of Malawi (NBM) is owed K250 million.
The Nation sources said Rehman was reportedly traced in Pakistan by some Malawians with an interest in the matter who reported him to authorities and negotiated his repatriation to Malawi. On the other hand, Ibrahim was within Malawi.
Court documents indicate that Rehman reportedly obtained the bank loans using different properties belonging to Cotton Ginners Africa Limited as securities.
He is believed to have remitted over $5 million (over K3.6 billion at the current exchange rate) in foreign accounts, according to an audit report by Audit Consult Advisory Services Limited dated July 23 2017 which is contained in court documents.
Meanwhile, Ibrahim was yesterday afternoon scheduled to appear before the Blantyre Magistrate’s Court to be committed to the High Court of Malawi.
The amount at stake is K20 903 508 825, but it has also been established that total liabilities for Cotton Ginners Africa Limited is K23 656 808 338, with the company’s total assets pegged at K10 011 666 092.
The company requires K13.2 billion to return to solvency, court documents we saw indicated.
The local banks, in a move to recover their money and save their reputations, teamed up to object the bankruptcy application that remaining directors of Cotton Ginners filed at the High Court’s Commercial Court Division in Blantyre.
Abdul Kader Patel, one of the directors at Cotton Ginners Africa Limited, filed the insolvency application, proposing cooperation of all the banks and appointment of an administrator to manage the company under supervision of the court. n