Former RBM deputy governor Henry Mathanga has turned down a request to appear before President Lazarus Chakwera’s appointed committee to determine whether to have him dismissed for alleged fraudulent transactions.
Through a letter dated April 7 2022, which we have seen, Reserve Bank of Malawi (RBM) summoned Mathanga to a High Court judge Kenyatta Nyirenda-led committee hearing scheduled for this Wednesday at Latitude 13 Hotel in Lilongwe. Other members of the committee are Ronald Mangani and Dorothy Ngwira.
Mathanga argues in a letter to RBM Governor Wilson Banda that he already resigned as the central bank’s deputy governor, the same position the committee wants to form a determination on whether he should be sacked.
Therefore, he queries, that Section 11 (1) of the RBM Act which has been used to summon him applies to employees of the central bank. Further, Mathanga points out that the Forensic Audit report from which the RBM has raised the charges is being challenged in court.
“Following your suspension from duty at Reserve Bank of Malawi on 24th June 2021, the President of the Republic of Malawi appointed a committee to enquire into the information exposed by the Forensic Audit Report on the Reserve Bank of Malawi payment operations…
“I now give you notice that you are requested to appear before the said committee on 20th day of April 2022,” signed by RBM Governer, the letter reads in part.
RBM has charged Mathanga with three counts of breach of general powers and functions of the bank and failure to comply with the code of conduct. They all emanate from alleged irregular issuance of letters of credit valued at K13 billion to some companies.
These are Mulli Brothers Limited, Rock Ba Rock, FF Trading, Web Commercials Limited, JF Investments and Worldwide Wholesalers. They were contracted by government to supply fertiliser for the Farm Input Subsidy Programme (Fisp).
Reads the RBM letter in part: “Between January 2018 and June 2020, Mr. Mathanga intentionally acted in breach of the general powers and functions of RBM as set out at Section 26 of the RBM Act by facilitating at approving letters of credit valued at K13 659 499, 037 to private entities.”
The central bank said the approval of the letters of credit put it at risk of a loss.
In his response, Mathanga accuses the bank of mistreatment, having stopped him from working on August 13 2020, sidelined him from board meetings and removed him from the committees on which he was a member.
These circumstances, he says, forced him to resign, citing constructive dismissal.
“Through a letter dated 26th March 2021, I resigned as deputy governor and this was conveyed to the State President His Excellency Dr Lazarus McCarthy Chakwera in response to the letter on the same. I also commenced legal proceedings against the bank and the Office of the President and Cabinet on the same matter.
“In the circumstances, it is very clear that I am no longer a deputy governor of the bank for all intents and purposes. You may wish to observe that the cited provision used to constitute the committee, applies to the employees of the bank, which I am not,” writes Mathanga in a response dated April 14 2022.
In June last year, Chakwera suspended Mathanga over the allegations but the ‘deputy governor’ rebuked the move in a corresponding letter saying he resigned way back hence the suspension was void.
The audit report led to the arrest of Mathanga, former governor Dalitso Kabambe and other RBM executives.
In his resignation letter, Mathanga said government was in breach of contract, having reduced his K18 million monthly salary by half in addition to refusing to allocate him an official vehicle, as stipulated in his contract.
Following the suspension and Mathanga’s challenge against the same, Minister of Information Gospel Kazako told Nation on Sunday in June last year that his resignation was not accepted hence the suspension.
“His resignation is yet to be accepted by the Department of Human Resource Management and Development,” he said in a written response.
Kazako could not justify why the resignation was not accepted, pointing out that “the responsible department is looking at his resignation and they will respond soon.”
However, legal expert Shepher Mumba of Golden and Law firm in an earlier interview said even if the government did not accept his resignation, it cannot claim that Mathanga was still RBM deputy governor and therefore open to suspension.
“From the law, when somebody resigns that is affected. If he really tendered his resignation letter to his employers, it means his contract was effectively terminated.
“What remains now is to look at the terms of the contract whether he was entitled to something or whether the employers were entitled to anything or not,” he said.
Mathanga joined RBM 37 years ago and held a couple of positions before rising to the position of deputy governor in 2020. He signed a five-year contract.