By nyasatimes
Africa-Press – Malawi. State-owned trader Admarc is sinking deeper into what is fast emerging as one of the most damaging commercial scandals involving a public institution, after it ignored a two-week ultimatum to pay a local textile firm more than $15 million (about K26 billion)—a failure that now opens the door to multiple lawsuits, deeper financial exposure and intense scrutiny over how Malawi’s cotton trade is managed.
The deadline, set for November 24, 2025, expired without payment, despite clear warnings from Chartia Textiles Limited that legal action would escalate. Instead of resolution, the lapse has hardened claims of contract sabotage, reckless interference and possible abuse of public authority, with Admarc now facing the prospect of paying damages that could run into tens of billions of kwacha.
In a sharply worded demand dated November 10, 2025, Chartia accused the Agricultural Development and Marketing Corporation of breach of contract, inducing breach of contract and wrongful interference in several international cotton transactions—allegations that, if upheld, would point to systemic failures and decision-making breakdowns inside the parastatal.
The letter, addressed to then Admarc chief executive Daniel Makata and left no room for ambiguity.
“We hereby give you until the 24th November 2025 to make a payment of the total sum of $15 046 393.00,” it states, warning that failure would trigger both ongoing and fresh court actions, including claims for reputational damage.
That warning has now materialised.
When pressed to explain why the demand was allowed to lapse, Admarc retreated behind legal technicalities. Spokesperson Theresa Chapulapula said the matter was sub judice, refusing to address the substance of the claims or the financial risk to the taxpayer.
“All the issues raised are part of an ongoing case before the High Court Commercial Division, Blantyre in Commercial Cause No. 148 of 2023… therefore, we cannot comment,” she said.
But documents reviewed suggest that behind the legal silence lies a trail of overlapping cotton deals, conflicting commitments and questionable trade decisions that now threaten to explode in court.
At the centre of the controversy are multiple cotton transactions executed around the same period, raising troubling questions about who Admarc was selling to, under what authority, and at whose expense.
On July 1, 2022, Admarc issued Proforma Invoice No. 90922 for the sale of 150 metric tonnes of Malawi raw cotton to Swiss buyer Ecom Agroindustry Corporation at $1 829.82 per metric tonne.
Yet on the very same day, a Letter of Credit (No. IX01117016341737) was issued by Banque Cantonale Vaudoise of Switzerland to finance a far larger shipment—500 metric tonnes of cotton destined from Beira, Mozambique, to Chattogram, Bangladesh—with Chartia Textiles listed as the beneficiary.
Chartia argues that Admarc’s actions undermined this deal, triggering a chain reaction of contract breaches across multiple international markets.
Its claim is sweeping and financially explosive.
First, Chartia is demanding specific performance of a pre-financing agreement for 480 metric tonnes of cotton lint—or, failing that, $9.3 million in compensatory damages for breach of contract.
Second, it is claiming $582 240 for wrongful interference in a separate contract with CDI–Cotton Distributors Inc.
Third, Chartia is demanding $5.12 million, alleging Admarc’s conduct forced it into breach of contracts with four global cotton firms—Baobab Cotton Group, CDI, OTTO Group and Ecom Cotton—effectively blacklisting the Malawian firm in international trade circles.
Crucially, Chartia insists this is not a new fight, but an extension of unresolved disputes already acknowledged by the courts.
The demand letter cites Commercial Cause No. 148 of 2023, which ended in an agreed order on May 13, 2024. According to Chartia, Clause VI of that judgment explicitly allowed further litigation on outstanding claims—claims it is now activating after Admarc’s alleged non-compliance.
Documents also undermine any suggestion that Chartia lacked the financial muscle to execute its side of the deals.
A 2021 facility letter from Standard Bank Malawi shows the bank extended a K512 million guarantee facility to support Chartia’s operations. Additional correspondence from Ecobank Malawi, dated July 19, 2022, to the Export Development Fund, references the sale of a cotton ginnery to Chartia Holdings and a $1.39 million Sight Letter of Credit meant to finance cotton exports.
In a further escalation that could drag Admarc into another courtroom battle, Chartia chief executive Richard Kamoto Ashan has also threatened a separate lawsuit for reputational damage.
The letter accuses Admarc of orchestrating or encouraging the publication of a newspaper article titled “Admarc loses K234 million cotton money”, claiming it caused massive financial losses and further destabilised Chartia’s international relationships.
As Admarc maintains silence, the stakes continue to rise.
What began as a cotton supply dispute has now morphed into a full-blown test of governance, accountability and competence at one of Malawi’s most critical state-owned enterprises—one with direct implications for farmers, exporters and the public purse.
With K26 billion on the line, and more lawsuits looming, the unanswered question grows louder: who inside Admarc authorised decisions that now threaten to cost taxpayers billions—and will anyone be held accountable?
Source: Malawi Nyasa Times
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