The Anti-Corruption Bureau (ACB) has today arrested CDH Investment Bank Chief Executive Officer, Misheck Esau, over links with Pioneer Investments.
According to the Bureau’s spokesperson Egrita Ndala, Esau failed to monitor the business relationship and transactions of Pioneer Investments with CDH Bank.
Esau is expected to be charged with conspiracy, failure to conduct due diligence and monitoring, influencing the use of public officer for advantage and money laundering.
According to a report by the Anti-Corruption Bureau which leaked last year, Malawi Police Service (MPS) awarded a K2.3 billion contract to Pioneer Investment for the procurement of 500,000 food ration packs for MPS.
Karim used the contract to steal K466 million from Malawi Government and defraud CDH Investment Bank of K1.5 billion.
The ACB said it received a complaint in 2017 that Karim was fraudulently awarded a contract for the procurement of food rations.
After investigations, ACB established that MPS Director of Finance Mr G.I Bottoman and Karim connived to award Pioneer Investment the contract.
The bureau found that six months before Karim’s company was awarded the contract, Bottoman made an undertaking to CDH Bank requesting the bank to loan Pioneer Investment K970,284,000.
“Again on 16th August, 2015, Mr Bottoman and Zameer Karim made an undertaking to CDH that MPS will remit K2,125,000,000 to the bank to enable Pioneer Investment to obtain a loan from the said bank to finance ration pack contract,” the report revealed.
Six days after the contract was signed, the company asked for upward adjustment of the contract from K2.3 billion to K2.79 billion with the difference being K466 million. This was fraudulently approved by MPS Director of Finance Mr G.I Bottoman.
When Karim received payment for the supply of the packs in 2016, he deposited K145 million to a Democratic Progressive Party Standard Bank Account number 014003192200 managed by President Peter Mutharika.
Karim however did not pay back the loan to CDH and the bank successfully sued Pioneer Investment and Attorney General for K1.5 billion.
In its recommendations, ACB said Bottoman and Karim should be prosecuted for stealing K466 million, forging and uttering false documents to CDH and for acquiring K1.4 billion while knowing that the money was proceeds of a crime.