* The FIA didn’t know, the Registrar of Financial Institutions only knew in July. The activities have been going on for so long
* NBM — a private sector entity — flagged this entity several times, but government institutions didnt even know although there were [red] flags
* Are we this simple, easy, and naive? Kodi mma ofesi mu mukumatani anthu inu?
By Duncan Mlanjira
A report by Platform for Investigative Journalism (PIJ) published on Wednesday has exposed a web of underground financial dealings involving businesses managed by Asians of Malawian origin who run an underground financial institution that, among others, acts as ‘banks’ for their business community.
PIJ reports that the cartel also acts as the community’s forex dealer, “moving millions of dollars out of the country through ‘couriers’”.
This was exposed after a financial deal went wrong between several Malawian and UK businessmen that is in court and in its investigations, PIJ talked to various sources privy to the goings-on, who revealed of the existing backstreet banks, particularly among Asian community.
PIJ reported that a source at the National Bank of Malawi, who is a very senior manager but was not named for confidentiality’s sake, reported that the bank had red-flagged Victoria Forex Bureau several times owing to its suspicious deposits.
The source revealed that Victoria Forex Bureau “often deposit around K400 million on a daily basis, but the source of the funds is inexplicable” and NBM alerted these red flags by the bureau to both the Reserve Bank of Malawi and the Financial Intelligence Authority (FIA) “but surprisingly, there has been no action against them”, the source is quoted as saying.
PIJ indicated that was unable to independently verify the claims by the NBM source but contacted the FIA, who responded they they have never received any reports on the mentioned business persons nor on Victoria Forex Bureau.
Quoting FIA compliance and public relations manager, Masautso Ebere said the authority is not aware of any financial institution that is operating that kind of syndicate in the country.
“The FIA is not aware of any illegal bank – a bank that is operating without a licence,” he is quoted as saying, while disassociating FIA from this, saying that “licencing of the banking sector in Malawi is under the mandate of the Registrar of Financial Institutions [the Reserve Bank of Malawi].
“The mandate of the FIA is derived from the Financial Crimes Act, with a core function to receive and analyse financial information and disseminate financial intelligence to relevant competent authorities.
“The FIA does not operate outside this mandate,” he further said adding that FIA does not investigate any abuse of a licence by a regulated entity, as this falls outside its mandate.
PIJ also contacted the Reserve Bank of Malawi, who are quoted to have said the Registrar of Financial Institutions werewas only made aware of the ‘illegal bank’ on or around July 5, 2022.
“RBM was indeed tipped on the alleged illegal operations relating to Victoria Forex Bureau Ltd and/or alleged illegal trading in forex by Malawian Asian businesses,” the central bank’s PR manager Davie Ndege is quoted as saying.
“RBM together with other Law Enforcement Agencies will investigate the allegations and may take action depending on the outcome of the investigation.
He also told PIJ that although RBM conducts periodic on-site inspections and off-site analysis of the business of all licensed forex bureaus in Malawi to check compliance with the relevant laws and regulations, they have investigated Victoria Forex Bureau for illegal transactions or any violations related to the abuse of its licence.
Responding on social media, Facebook, Prof. Betchani Tchereni was incredulous to these responses, saying: “Based on this PIJ report, I now can conclude that Malawi is the easiest country for financial crimes.
“The FIA didn’t know, the Registrar of Financial Institutions only knew in July! The activities have been going on for so long; NBM — a private sector entity — flagged this entity several times, but government institutions didnt even know although there were [red] flags!
“Are we this simple, easy, and naive? Kodi mma ofesi mu mukumatani anthu inu?”
Another commentator insinuated that “most government institutions are non-functional. People are in their office just to be paid salaries and benefits and get pension at the end”, with Anock Sylvester accusing Malawian civil servants and those working in government entities “don’t perform their duties effectively but they demand higher salaries and promotions”.
“I think government must do performance appraisal and demote those who are not performing regardless of their qualifications,” to which Charles Nyerere agreed, saying civil servants “no longer work in offices” but are always out in the field and attending workshop after workshop, leaving offices to interns”.
John Chauma said Malawians shouldn’t be “cheated that the authorities didn’t know”, adding that the citizenry knew of many shady financial deals taking place and obviously the authorities ought to have known and suspected that “they are part of the cartel”.