Africa-Press – Malawi. In the murky fertiliser purchase deal that ended up with the government being fleeced K750 million, skeletons keep falling off the cupboard – the latest being that the two firms which the government engaged had a combined K90 million capital in their reserves.
Government wanted them to supply 25,000 metric tonnes of fertiliser for the Affordable Inputs Programme (AIP).
We have information (whose form and source we will not disclose for the protection of our contacts) that an agent by the name of Caroline Muthusamy, based in the UK, facilitated the deal there on behalf of the government.
And while it is only Barkaat Foods Limited which has been in the limelight about this deal, there were actually two firms which the agent was working with, the other being Food Line Wholesale Limited.
In March 2022, Food Line Wholesale Limited had applied to be dissolved but it reversed the decision apparently after signing the sales and purchase agreement with the Government of Malawi.
We can also report that authorities had been briefed about the unsuitability of the two firms in such a multi-billion kwacha deal. But this information came late, after the deal had already been signed, because the Ministry of Agriculture had not cared to consult appropriate government offices to conduct due diligence ahead of entering the deal.
It is not clear why.
According to the information we have, Food Line Wholesale Limited was found to have capital and reserves amounting to about £44, 000 (around K52 million).
On the other hand, Barkaat Foods Limited which government handed the contract was found to have reserves of only about £33,000 (about K39.2 million in current exchange rate).
In effect, the two firms lacked financial capacity to undertake such a huge procurement assignment.
And instead of providing account details of the company in the United Kingdom, Barkaat Foods Limited provided details of their account based in Germany.
Government made the transaction early in June 2022 but the German Bank rejected it on suspicion of fraud. Barkaat Foods Limited told the government to make the transaction in another account in Turkey instead.
But it is yet to be established why it reverted to the Germany account where $543,000 was deposited.
Government processed the payment on Thursday June, 16 2022.
Prior to the payment, officials of Barkaat Foods Limited had kept being dodgy on calls for inspection of the fertiliser consignment they claimed to have procured. They gave one excuse after another. When the company got paid, it terminated the contract.
At some point, it did produce documents indicating it had procured the fertiliser from Yara. But the name of the source of the consignment was not that of Yara.
In a statement last month, the Ministry of Agriculture said, through Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM), it paid the K750 million “to lock the price” of the fertiliser.
“Barkaat Foods Limited failed to supply and consequently terminated the contract citing loss of production line at Yara UK and that they could no longer commit to supply the fertilizer,” read the statement, signed by the then Principal Secretary, Sandram Maweru.
We have further gathered that $543,000 was later paid directly into Barkaat Foods Limited account in Germany. The other amount, $182,000, was paid into an account of a firm known as Bova Investment Corporation which is based in New Jersey in the United States of America.
An online search for the profile of Bova Investment Corporation has not turned up impressive results. We did not find direct link to the company. But information sourced on https://opencorporates.com/ companies/us shows that Bova Investment Corporation whose registration number is 0450426628 is a domestic profit company that was incorporated in October 2019.
Attorney General Thabo Chakaka Nyirenda confirmed the developments.
“I can confirm that about $182,000.00 that was deposited in USA has been recovered and requisite documents have been processed to retrieve $543,000.00 that was paid into a Barkaat Foods Limited account in Germany on instructions from Barkaat Food Limited and the total amount is US$725,000.00,” Chakaka Nyirenda said.
He said he has been working with the Malawi Embassy in the UK that discovered that Barkaat Foods Limited was owned by rogues.
“In June this year officials from Malawi government visited the physical address provided by Barkaat Foods Limited and found that the address was occupied by a different firm.
“It contacted Yara who could neither confirm nor deny that they had been approached by Barkaat Foods Limited. Following this, the Embassy alerted the officials back home,” Nyirenda said.
Centre for Social Accountability and Transparency’s executive director Willy Kambwandira has since described the scandal as national tragedy.
“Our worry is that there appears to be selective enforcement of the law. It is only Parliament that is investigating the matter. We are not hearing anything from the other law enforcement agencies. There are no arrests and this is what makes people angry. It is our expectation that no one will be shielded from justice. This is purely criminal,” Kambwandira said.
He said the law enforcement agencies need to commence criminal proceedings against all public officers involved in the deal.
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