Admarc boss admits Malawi borrowed from PTA Bank for maize purchase

…Finance Ministry clears it name

As the separate probe into the ‘unscrupulous’ purchase of maize from Zambia continues, Admarc has admitted borrowing from the Eastern and Southern African Development Bank (PTA Bank) with the controversy now lying on the dates contracts between middlemen and suppliers were made.

Admarc boss Foster Mulumbe yesterday told the Parliamentary Committee on Agriculture that government really borrowed money from the bank amounting to K26 billion to purchase 100, 000 metric tonnes of maize from government of Zambia through Zambian Cooperative Federation (ZCF)

Admarc documents indicate that it had signed agreements with ZCF and middleman Kaloswe Commuter and Courier Limited on 17th June 2016.

However in outlining the role of the Ministry of Finance in the development, Director of Debt and Aid in the ministry Madalo Nyambose said it is on the same date that her ministry processed funds from PTA Bank.

It is claimed that the contracts were later cancelled.

According to Nyambose, the ministry had not received any formal communication from Admarc on the agreements with ZCF and Kaloswe let alone those of the cancelation.

She told the hearing that the Ministry of Finance was also not aware of the finalization processes of the purchase of the staple grain.

At the moment Kaloswe has sued Admarc and ZCF for breach of contract.

According to a statement of claim filed at the Lusaka High Court, Kaloswe Commuter and Courier Limited chief executive officer Isaac Kapambwe said his company entered into contract with ZCF for the supply of 100,000 metric tonnes of maize at a unit cost of US$215 per metric tonne and at a total contract sum of US$21.5 million.

Kaloswe also signed a contract with Admarc to supply to the Malawian company the 100,000 metric tonnes of maize the Zambian company bought from ZCF at the price of US$345 per metric tonne (total cost of US$34.5 million).

Kapambwe explained that the contract Kaloswe Commuter had entered into with Admarc was to be financed by Kenya based Eastern and PTA Bank and that to ensure efficient delivery of the maize to Admarc, the PTA Bank was to pay the full contract sum of US$34.5 million directly to the source that the commodity would be purchased from, that is, ZCF.

Malawi government had approached the Zambian counterpart to procure 300,000 metric tons of maize. Minister of Agriculture, George Chaponda and Admarc officials met Zambian team on May 18th, 2016 to seek for importation of the grain since there was a maize exportation ban in that country.

Zambian government through its Food Reserve Agency (FRA) on June 11th, 2016 refused to sell maize to Malawi on the basis that it had not enough carryover stocks to export until a new crop is bought later that year, forcing Admarc to sign contracts with Kaloswe and ZCF on June 17th, 2016 to supply 100,000 metric tons respectively at a cost of US$34.5 million (US$345 per ton).

ZCF and Kaloswe were supposed to supply the maize within 120 days from the date of the contract but details started emerging that revealed that Admarc had been caught up in web of lies and dishonesty when it discovered that Kaloswe had also entered into contract agreement with ZCF to purchase maize that was to be supplied to Malawi.

The contract between Kaloswe and ZCF was signed on May 31st, 2016. Kaloswe was to buy maize from ZCF at US$215 from ZCF’s depots across the country which was to be sold to Malawi at US$345 per ton, meaning the company was earning about US$130 per each metric tonnes.

Responding to a question on whether Malawi had a deal with Zambia, the Admarc boss maintained to have had talks on the purchase of maize with government of the neighbouring country.

“In my view I would say so because Admarc is an institution under government and ZCF is under Zambian government,” said Mulumbe.

Mulumbe further said Admarc dumped Kaloswe after noting that the company was not an eligible supplier of maize as the company failed to disclose where they were to get the maize.

The Parliamentary Committee on Agriculture continues to hear from concerned sections which include Admarc at the centre, Office of Director of Public Procurement in Malawi (ODPP) and Finance Ministry.

However there is a special Commission of Inquiry into the matter as appointed by President Peter Mutharika whose findings will be submitted to the president on 31st January 2017.