The Human Rights Defenders Coalition (HRDC) has accused Salima Sugar Company (SCC) of corrupt practices, tax evasion and illegally sending millions of dollars to India.
According to a letter signed by HRDC Chairperson Gift Trapence and addressed to Anti-Corruption Bureau (ACB), the company sends millions of dollars to India on the pretext of procuring materials as the raw materials are also procured using inflated prices.
Malawi Government holds 40% shareholding in SSC and on the strength of this shareholding, Malawi Government guaranteed a loan of US$18 million from EDF and another loan worth US$6 million from CDH Bank.
According to the HRDC, the transactions were done during the time of Democratic Progressive Party (DPP) Government.
“Further, it is alleged that the company is under an obligation to remit 12 million shares to Malawi government but it has not done so until now.
“It is further alleged that the company does not release financial statements and does not remit dividends to the Malawi Government,” Trapence explained in the letter.
On transfer pricing, HRDC said SSC is licenced to produce brown sugar only and that the company illegally imports white sugar from Tanzania which is then repackaged for sale.
On allegations of Tax Evasion, the letter explained that SSC has not been paying tax for the past five years with the help of some MRA officers during the DPP regime.
Salima Sugar Company has also been accused of sidelining local farmers.
“It is alleged that SSC was supposed to be buying sugarcane from local farmers in Salima. However, it is alleged that SSC has been buying sugarcane from politicians and senior public officers who are decision makers in matters affecting SSC,” the HRDC said in its letter.
The HRDC went on to say that because of that, the decision makers do not act on SSC’s malfeasance such that poor farmers were removed from the SSC land and have never been compensated.
Salima Sugar Company is owned by the Malawi Government (40 percent) and Aum Sugar Company of India (60 percent.)