The Democratic Progressive Party (DPP) administration has launched an unprecedented attack on long serving Press Corporation Limited (PCL) Group Chief Executive (GCE) Mathews Chikaonda, who is also the country’s most influential conglomerate chief.
In a statement – which is going to send shockwaves across the private sector – Minister of Information Jappie Mhango says Chikaonda, who has been head of Press Trust owned PCL for 14 years, has “destroyed” the conglomerate.
Mhango said to become GCE, Chikaonda was “just handpicked” by the former President Bakili Muluzi and “imposed” on the Press Trust Board without following proper channels as required in corporate governance, despite serious reservations from Press Trustees at that time.
“He has had three times three-year contracts and a final five-year contract approved by the board. This is against good corporate governance as we know it.
“This time, he asked for an 18-month extension on top of the above four contracts. He then participated in the discussions and decision to grant this 18-month extension,” said Mhango in a statement.
According to Mhango, Chikaonda followed his illegal appointment with a string of other “illegal”, “obscene” and “criminal” financial manoeuvres.
“In May 2014, this GCE signed an internal Memo alleging that the Board had approved a car allowance of MK6, 312, 572 every month for himself,” said Mhango.
The minister added that the conglomerate head also offered car allowances for other officers including the Exco (MK4,708,446), general managers (MK3,351,109), senior managers (MK2,610,743) and other managers ( MK1,993,772).
The move was however foiled by the Trustees of Press Trust who put a stop to “the immoral and callous allowances”
During Chikaonda’s tenure as GCE, many companies owned by PCL have failed while others have been facing major financial issues.
According to government, a total of 11 companies including Press Poultry, Hardware and General Dealers, and Tambala Food Products have been closed during over the past 14 years while Chikaonda has also failed to run firms such as Tourism Cape Maclear Resort, Energy-Solar and Hydropower, and Chapima Heights Residential Project which were established to replace the closed ones.
The government spokesperson said out of the 12 remaining units of PCL, only five are running smoothly while the other six including BBGL Carlsberg Malawi Ltd (PCL lost majority shareholding) and MTL (technically insolvent) are facing major challenges.
According to the DPP led government, Chikaonda has “completely destroyed the intended character of PCL” which was to stimulate economic activity throughout Malawi
Recently, People’s Trading Centre (PTC), a subsidiary of PCL, closed twenty shops in the country and management cited the current economic turndown for the closure of the shop.
Mhango however says all shops were “being run most profitably before” but Chikaonda “pushed the PCL Board Members for a speedy decision to close these shops.”
As one of the major shareholders, the information has also shocked government and six months ago the President Peter Mutharika led administration wrote PCL management to get clarifications on some of the issues.
Other stakeholders have also sought answers on why companies were sold and how so many new proposed companies failed.
According to Mhango, there are stories of billions of Kwacha missing from PTC, Carlsberg and elsewhere in the group and shareholders are demanding forensic audits done in those companies.
PCL management have however been reluctant to provide the requested information, a move which has raised suspicions.
Government says it has since called for a shareholders meeting to assess the extent of the mismanagement and start taking remedial measures.