Moses Khombe, Director of Sheba Oil and Gas Company, has admitted authoring an email in which he appeared to pressurize Government officials to pay K750 million to United Kingdom based butchery Barkaat Foods Limited.
Khombe yesterday appeared before the Joint Parliamentary Committee which is investigating the alleged fraudulent payment of K750 million to Barkaat for the supply of fertilizer. The money was paid to two accounts in Germany and United States as part of a deal to procure 25,000 tonnes of fertilizer.
Khombe said his company wrote a proposal to introduce Ministry of Agriculture to fertilizer suppliers in Colombia, United Kingdom, Germany and India.
One of the companies was Yara which he said advised the ministry to deal with its broker Barkaat.
According to Khombe, his company conducted due diligence on Barkaat and found that the UK firm had previously supplied fertilizer to South Africa.
Initially, Khombe during the inquiry said he did not remember wiriting an email to Malawi Government officials regarding the deal.
Khombe claimed that his company only introduced the Ministry of Agriculture to Barkaat and did not get involved in other discussions regarding the fertilizer deal.
Legislator for Chikwawa North Owen Chomanika then read the email in which Khombe appeared to be pressurizing the ministry to pay money to Barkaat.
The email was sent to secretary to Treasury Macdonald Mwale, former Secretary for Agriculture Sandram Maweru, Budget Director Loyce Chilimsungwi and a South African woman identified as Caroline Mathusamy.
“Dear Sirs,
Please find the attached revised copy of the sell and purchase agreement (SPA) for ADMARC and SFFRFM.
We presented to the supplier all issues that were raised during the meeting on Saturday. Further, under the guidance of the Bank in Singapore, a complete due diligence on the supplier was conducted. After a lengthy of discussion with the supplier we have come to an agreement and the following sections have been amended:
As per recommendation from the Ministry of Finance, the seller has accepted to issue a standard performance bond of 2%. This clause has been added in the SPA.
All payments to be made to the company which has a production line with Yara and no third party in this regard will be involved. This concern was raised by some members during the Saturday meeting and again it was a major concern too with the financier.
We have changed the supplier’s name to match the name that has a contract with Yara. We have replaced Food Line Wholesalers with Barkaat Food Ltd.
Now in order for us to secure the price of $290 per ton, the following steps should be taken immediately.
We need both ADMARC and SFFRFM to sign the revised SPA and the invoices by closure of the day. Failing which the prices will be adjusted upward from next week to $480 per ton from the initial $290. We believe this is avoidable if we can only comply with what the supplier is requesting from us.
We need to pay a 10% commitment fee to the supplier by Friday this week. Out of this amount, ADMARC will pay 5% and SFFRFM will pay the other 5%. After paying this commitment fee, the supplier will send the first shipment of 25,000 tons as a trial run.
We therefore request your noble office to authorize ADMARC and SFFRFM to take a quick action on the suggested steps in order to seal the transaction.
We thank you so very much for your understanding. If you have any questions, suggestions or concerns please let us know,” reads the email.
Khombe confirmed during the inquiry that he indeed authored the email, saying he had been reminded about it.
He also noted that the deal to procure fertilizer was cancelled soon after Barkaat received K750 million from Malawi Government.
According to Khombe, he was told by Barkaat Foods owner Abdul that the commitment fee was refundable if the deal collapsed.
He added that his company expected that upon completion of the deal, it would receive commission from Barkaat but this di not happen.
“Abdul did not give me any money out of the K750 milllion that he received from Malawi.
“When the agreement failed between Barkaat and Government, Abdul told me that the money that was sent to America was wired back to Malawi and the other money which was in Germany it was waiting for paperwork to be wired back to Malawi,” said Khombe.
During the inquiry, Members of Parliament appeared frustrated with many of Khombe’s responses and his conduct of ignoring some questions and the legislators accused of him of lying.
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