Lipenga cleared of MRA borrowing scam

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Category: News Flash

Published on Thursday, 28 June 2012 17:47

Written by Chikondi Juma & Queen Nhlema

Finance Minister Ken Lipenga has been cleared from the Malawi Revenue Authority, K15 billion zero deficit budget loan scam.

Vice President Khumbo Kachali, who headed a commission of inquiry on the matter, told parliament on Thursday that Lipenga operated in a non-conducive environment where there was no proper coordination between various sections of the ministry.

Kachali’s report, which confirmed MRA’s borrowing of about K14.3 billion from across several commercial banks in the country, however implicates former secretary to the treasury Joseph Mwanamveka.

According to the report, the money was borrowed on varying interest rates of between 17 and 19 percent, which was then above the official base lending rate, and totaling to K61 million in three months.

However, the vice president said “officials from the ministry of finance and MRA borrowed these funds without consulting the finance minister.”

Said Kachali: “It appeared that there was an atmosphere in mistrust among and between officials with one or two most senior officials perceived by others to have close contacts with the powers that were there.

“The Secretary to the Treasury at the time as principal finance advisor did not handle the issue in a professional and objective manner as one responsible to the minister of finance as provided for in the Public Finance management Act as per section 7, subsection 1 and 2.

President Joyce Banda instituted the inquiry amid intense public pressure that finance minister Lipenga should step down or be dismissed over the matter.

It was widely argued that as head of the ministry at that time, Lipenga was either involved in the scam or not competent enough to head the ministry.

Member of Parliament for Balaka south George Mnesa was the first person to report about the scam in parliament last year but was hugely dismissed by the DPP government.

Opposition legislators questioned the credibility of the report suggesting that Lipenga new about the MRA undertakings based on his refutes in Parliament after Nnesa firstly brought up the issue.

Thyolo Thava legislator Linfred Nawena described findings of the report as shameful.

Said Nawena:"There is total lack of evidence to suggest that Lipenga was not aware"

"How can we pretend that Lipenga was not aware when he was part of Business Committee at times and the MRA issue was discussed?"

The Vice President however said he stand by what he has told the House and the nation that the minister “was not aware”