Maize Saga: Admarc can remit only MK1.1 billion

Posted on March, 20, 2017 at 11:13 am


THE Sunday Times has been established that Admarc can only raise K1.1 billion from the maize the Malawi Energy Regulatory Authority (Mera) bought using K2.9 billion from the Price Stabilisation Fund (PSF).

Documents we have seen show that 10,000 metric tonnes of maize were bought from AHL Commodities Exchange (AHCX) at K270 per kilogramme, but the Agricultural Development and Marketing Corporation (Admarc) sold the grain at K110 per kilogramme.

It is further understood that Mera paid for transport charges of the maize at a flat rate of K65 per tonne per kilometre. However, the documents say it was discovered that not all maize was located in Lilongwe as some of it was collected from AHCX depots in Balaka and Limbe.

According to the arrangement, Admarc was expected to account for the maize using a ring-fenced accounting system and Admarc was given a bank account into which it was supposed to deposit proceeds from the maize sales.

“Despite the agreement, Admarc only deposited K250 million to Mera Maize/ Drought Fund account. Separate interviews with Admarc DOF [Director of Finance] and DOO [Director of Operations] on 26 October [2016] and Admarc Chief Executive Officer [Foster Mulumbe] on 27 October 2016 agreed that they only paid K250 million out of K1.1 billion for the total proceeds of 10,000 metric tonnes of maize,” reads part of a forensic audit report on the issue by the National Audit Office (NAO).

But a press statement from Mera board chairperson Reverend Joseph Joseph Bvumbwe, released on March 10, 2017, only covered a directive by the board of directors to Mera management “to do everything possible to recover from Admarc the remaining proceeds of the sale of maize for remittance to the Price Stabilisation Fund”.

The statement did not, however, reveal  what had been recovered and what was remaining. The Mera board approved the purchase of 10,000 metric tonnes of maize using the K2.9 billion from the PSF with the aim of assisting people affected by hunger in Balaka, Blantyre and Nsanje early last year.

According to the forensic audit report, Limbe was to get 3,000 metric tonnes, Balaka 2,000 metric tonnes and Bangula 5000 metric tonnes.

The audit report also says when Mera was informing the AHCX on the purchase and transportation of the 10,000 metric tonnes to various depots, the agreement was that the delivery procedure would be 100 percent.

“However, an examination of good receiving notes and daily to date Mera maize receipts revealed that there were some delivery anomalies by transporters in contract with AHL Commodities Exchange due to rotten, weevil and discoloured maize delivered. Other bags were stolen in transit,” reads a section of the report.

The report also recommended that AHCX should account for the unusable or nondelivered bags to Mera and that transport claimed by transporters should be recovered in relation to quantity. Mera’s use of the K2.9 billion to purchase maize for Admarc led to the dismissal of Chief Executive Officer Raphael Kamoto and the termination of the contract of Director of Finance Elias Hausi.

According to the press statement from the Mera board, the decision was made for “their actions which led to non-compliance with the Public Finance Management Act and the Public Procurement Act, in the purchase of maize”. Kamoto has, however, obtained an injunction at the High Court against his dismissal.

In a recent interview, National Secretary for Catholic Commission for Justice and Peace, Martin Chiphwanya, faulted the participation of the board in the disciplinary hearings of Kamoto and Hausi. “It certainly was not proper that the same board that was part of the decision-making process be in the disciplinary committee.

This is contrary to principles of natural justice and raises a number of questions. It is ethically questionable for the board to sit on a case they are party to. This is failure of governance,” he said.

He added: “In all fairness, the board should have stood aside and let an independent body or commission handle the disciplinary aspect.

As it is, the board’s hands are not clean either and they, too, ought to be investigated.” In the Weekend Nation yesterday, labour law lecturer Mauya Msuku observed that the Mera board has rendered itself prone to lawsuits for firing Kamoto and Hausi for implementing its decision.

Source: The Times Group