The Human Rights Defenders Coalition (HRDC) has accused former National Economic Empowerment Fund (NEEF) boss Mervis Mangulenje of awarding about K80 million in loans to friends and relatives.
In a letter to the Anti-Corruption Bureau, (HRDC) claims that ex-NEEF chief executive officer Mervis Mangulenje awarded a MK60 million loan to her close friend Mr Banda and MK7 million to her blood sister without following procedures.
NEEF which was previously known as MEDF had a plant in Nkhotakota which was reportedly repossessed and given to Mangulenje’s cousin.
The equipment which is valued at MK33 million was planted in Mzuzu and Mangulenje’s cousin also pocketed a loan amounting to MK12 million to operate the equipment. To date, the person has only repaid MK800,000.00.
“It is further alleged that a MK3 million loan was given to Mr. Phocas Sikaloka without following procedures. Mr. Sikaloka is MARDEF’s (now NEEF) Head of Support Services. The loan was given to a dairy farm business.
“We have also received specific allegations against the Internal Audit Manager, Mphatso Naveya. It is alleged that he facilitated granting of loans to his wife, his sisters, his brothers and his in-laws,” reads part of HRDC’s letter to the ACB.
According to HRDC, an audit report by the Central Internal Audit Unit indicates that there was gross abuse in the disbursement of at the company.
The report highlights multiple disbursements of loans to the same beneficiaries, which resulted in over disbursement.
Some people who cannot be traced also received loans from NEEF.
“The report states that 35 out of 326 sampled loan beneficiaries that received MK64,335,000.00 could not be physically traced by the audit team together with MARDEF officials at the branch where the loan was supposedly obtained from.
“The audit report also highlights that ordinarily loan applicants should be verified by MARDEF branches. However, a review of loan files established that 158 (16%) of the 1003 sampled loan files amounting to MK287,564,456 were processed by Head Office bypassing the procedures that were supposed to be performed by branches,” reads part of the letter.
The audit report which HRDC highlights in the letter also showed that some loan applications were directly handled by Executive Management which consisted of the CEO, Head of Operations, Internal Audit Manager and the Risk and Compliance Officer.
This mismanagement led to cases where loans could not be traced to a particular branch and beneficiaries were only traced by the audit team but not known by any branch.
In some cases funds were idle in bank accounts of beneficiaries because neither the beneficiary nor their branch knew about the disbursement.
The HRDC has since appealed to ACB to investigate the allegations against NEEF.