Shoprite was recently fined K5 million as the Reserve Bank of Malawi (RBM) ramped up its fight against the practice of quoting in foreign currency.
According to RBM Governor Dalitso Kabambe, in 2019 the Bank successfully investigated and prosecuted several cases on quoting in foreign currency for goods and services provided in Malawi.
Shoprite was one of the companies charged with quoting of rental agreements in foreign currency and the matter was heard on 18th November, 2019 in Blantyre.
The company pleaded guilty and was sentenced to pay a fine of K2 million and was also ordered to pay Reserve Bank of Malawi K3 million.
Another company Broll Malawi Limited was also sentenced to pay a fine of K3 million and ordered to pay K1 million to the Bank for quoting tenancy agreements in foreign currency contrary to the 2006 (Exchange Control us of Forex in Local Transactions) Regulations.
According to Kabambe, the Bank also concluded investigations involving several landlords who quoted tenancy agreements in Malawi in foreign currency and will soon prosecute them.
On other foreign exchange crimes, Kabambe mentioned illegal foreign exchange externalization as a crime that is enormous and rampant in the country saying it involves millions of dollars.
He noted that in 2019, RBM established a fully-fledged foreign exchange Investigations Unit which was adequately capacitated with experienced investigators to fight the vice.
The bank also executed an agreement on information sharing, investigations and prosecution with several law enforcement agencies and other public institutions and this has led to conclusion of several investigations mainly involving Malawians of Asian origin, Chinese nationals and some indigenous Malawians.
According to Kabambe, the people involved were using some banks, such as Nedbank to illegally externalise the forex from Malawi.
One notable case in 2019 involved Moinuddian Mohamed Iqbar Sodagar who was found with US$622,820, 15,860 Euros and £2,015 and 15 pieces of bullion weighing 13.747 kgs in total valued at K371,938.694.53 at Kamuzu International Airport without permission of Minister of Finance.
In February 2019, a court ordered forfeiture of the foreign currency and bullion to the Malawi Government and imposed a custodial sentence of 4 months on the offender.
Another case involved 8 people who obtained US$7 million from different banks under the pretext of travel.
A court ordered the eight persons to pay fines while five of the convicts were also given custodial sentences of not less than 14 months.
