K30 Billion Worth Of Foreign Exchange Cases In Court

By Patricia Kapulula-MANA

About K30 billion worth of cases involving foreign exchange which has been externalized outside the country are currently being prosecuted and running in the courts, Reserve Bank of Malawi (RBM) has revealed.

RBM Governor Dalitso Kabambe told journalists in Lilongwe on Monday on the sidelines of an execution of a Memorandum of Understanding (MOU) on intelligence sharing, investigation and prosecution of financial crimes.

He cited people doing business in the country as culprits of the crime saying some of them are not bringing back what should have come into the country.

However, he said part of the money has been recovered.

“As much as close to a billion Kwacha has already been forfeited to the Malawi Government through cases that have been concluded,” he said.

Kabambe gave a practical example of the Cotton Ginners case where as much as US$20 million (approximately K15 billion) was siphoned outside the country after exporting cotton. The case is currently in court.

One of the cases which was in court and has gone in the favour of government is the Sodak case where an equivalent of K400 million was externalized.

According to Kabambe the money has been recovered and forfeited to the Malawi Government.

Apart from the above cases there have been cases where people have alleged to import goods by getting more forex than the actual value of what has been imported or under declaring the exports.

“Such individuals send out so much volume of Malawian exports and yet they declare little that comes back into this country.

“So these cases are rampant. Some are even as small as getting passports of individuals and then go to commercial banks with passports that they are travelling outside asking for US$10,000 each, for example,” he said.

He added that the passports may be for 10 or 20 people which translate to huge amounts of money being transferred illegally.

In order to address such issues, Kabambe said an automated system has been put in place which will ensure that all transactions of exports and imports are automated, checked and cleared before the actual transaction has been done.

He believes that the automation would improve the system unlike the manual one whereby documents could easily be manipulated through forging or photocopying.

Director of Public Prosecutions Mary Kachale disclosed that in partnership with prosecutors from RBM nine cases have been concluded so far and nine others are in court.

She said the MOU will go a long way in speeding up the prosecution of high profile cases which were previously delayed.

She observed that delays came about because of gaps in the evidence that needed to be filled before taking the case to court despite investigation agencies finalizing them.

“Investigative agencies will alert us when they are investigating certain cases where they need prosecutor guidance and then our office will designate a prosecutor to analyse the evidence alongside the investigators so that when investigators come to a close they should be enough evidence or adequate evidence sufficient to bring the case to court,” she said.

Recently, parliament passed the RBM Act which has increased penalties to about K25 million for such illegal transactions plus seven years imprisonment compared to the old act which had very low punitive measures.

Meanwhile, RBM is revising the Exchange Control Act which will improve regulatory framework in place.