UK govt continued with 2013 Cashgate investigation on businessman Sattar long after ACB cleared him of wrongdoing

Sattar was not under any formal investigation by the ACB

* Until the UK notified the Malawi government of its action to arrest Sattar, he was not under any formal investigation by the ACB

* The British government had funded Baker Tilly’s forensic audit into Cashgate

* Its report found that two Sattar-linked companies, Top Prima and Rummage Pace, were the biggest beneficiaries of Cashgate

* They received K12 billion in payments for purported supplies to the Malawi Defense Force

By Duncan Mlanjira

Britain’s anti-corruption authorities, alongside Malawi’s Anti-Corruption Bureau (ACB), are reported to have arrested Malawian-born businessman Zuneth Sattar last week together with several associates in the United Kingdom and Malawi.

The investigation by Britain’s anti-corruption authorities, that comes as a big surprise, is reported to be connected to the 2013 Cashgate scandal — the biggest theft of public funds in Malawi’s history.

A report by UK-based investigativeplatform-mw.org quotes ACB sources as saying that until the UK notified the Malawi government of its action to arrest Sattar, the businessman was not under any formal investigation by the Bureau.

The report says in December 2015, under legal guidance from the then-Attorney General Kalekeni Kaphale, the ACB cleared Sattar and his companies from involvement in the 2013 Cashgate scandal.

Three years earlier — the investigativeplatform-mw.org reports — the British government had funded Baker Tilly’s forensic audit into Cashgate which, among others, found that two Sattar-linked companies, Top Prima and Rummage Pace, were “the biggest beneficiaries of Cashgate” in which they received K12 billion in payments for purported supplies to the Malawi Defense Force.

Quoting the Baker Tilly report, the online says the items — arms and ammunition — were clearly overpriced and suspicious and that Rummage Pace, which between 23 October 2013 and 21 October 2013 had received government funds totaling, at least, K5 billion through Foreign Currency transfers but could not be traced.

“No documents from the Office Director of Public Procurement (ODPP) — now rebranded as Public Procurement and Disposal Authority (PPDA) — supporting the said payments could be traced either. The contracts and supplies were fictitious,” investigativeplatform-mw.org quotes the Baker Tilly’s forensic audit report.

“No evidence or request for proposal has been noted. Reference is made to single surrendering approved by Ministers of 15 August 2012 for procurement of riffles from Top Prima and Rummage Pace. No bank Guarantees have been (sic).

“No company due diligence was performed prior to payment and Rummage Pace has no (riding history in the supply of goods procured,” reads part of the Baker Tilly report.  

The online further quotes ACB spokesperson Egrita Ndala as confirming with the Nation on Sunday in 2015 that after months of investigations, the Bureau had established existence of valid contracts and delivery of services.

She had also said the Bureau had traced delivery notes and goods supplied by the companies.

While telling the Nation on Sunday that the Bureau would still continue investigations, Ndala had said: “Overpricing of goods and services potentially may indicate existence of corruption but only if a connection or money trail is identified between the suppliers and the public (sic) who were part of such transaction.

“Our investigations so far have not made such conclusions,” she had said but the UK government, though, had not let go and carried out the joint operation that further saw several homes and offices, both in Britain and Malawi, raided.

The investigativeplatform-mw.org reports that the arrests started on Tuesday morning, following a three-year-long investigation by Britain’s National Crimes Agency (NCA) into Sattar’s suspected corrupt dealings with Malawi government.

“The investigation focuses on the businessman’s dealings with both the Peter Mutharika administration and the current Lazarus Chakwera administration, with senior officials for both tenures facing possible legal peril,” writes the investigativeplatform-mw.org.

“Under the UK anti-corruption laws, UK citizens and residents can be prosecuted for corruption abroad and the agency had previously frozen Sattar’s UK bank accounts which resulted in a court battle.”

The investigativeplatform-mw.org also reports that ACB Director Martha Chizuma confirmed with them of the joint operation, saying they were “cooperating with our UK partners but this matter is still under investigation and I cannot provide any more details”.

The UK and ACB have reportedly signed a memorandum of understanding (MOU) on how the two sides will be conducting investigation and subsequent prosecution of those arrested.

It is reported that ahead of the arrests, unspecified number of NCA officers flew to Lilongwe to coordinate the operation with ACB while others kept a surveillance on Sattar’s houses and homes in Leicester and Lilongwe.

The investigativeplatform-mw.org reports that the development comes following UK intensifying the fight against corruption abroad with passing of Britain’s new Magnitsky Act.

This Act, which is a similar law enacted in the United States — is named after Sergei Magnitsky, a lawyer who was arrested and later died in prison in Russia after accusing Russian officials of massive tax fraud.

The new law gives the UK government the power to penalize those it says are credibly involved in the most serious violations of human rights and corruption. Other measures include freezing their assets and barring them from visiting Britain.