The High Court of Malawi has granted an order of Injunction against a Japan outfit, Yamaha Motor Company Limited and a foreign-owned firm registered in Malawi, Paramount Holdings Limited, over Yamaha dealership in Malawi.
The injunction was sought by a coalition of two local companies namely Luthando Holdings and Actor Import and Export Investments Limited who joined forces with Stansfield Motors Services Limited, a company which has been Yamaha dealer in Malawi.
The Court battle ensued following a contested candidature of Paramount Holdings whose directors are answering criminal charges related to fraud and forgery in which Paramount Holdings is accused of presenting forged documents in order to secure tenders to supply Yamaha motorcycles in both public and private institutions.
According to information sourced by this publication, on 20th May 2020, a non-governmental organization known as JHPIEGO advertised for Request for Quotation (RFQ) to supply them with 20 XTZ and 10 DT125 Yamaha Motorcycles. Different trading companies responded to the RFQ.
On 7 July 2020, some of the bidders were tipped by internal sources from the procuring entity that Paramount Holdings had used a fake certificate of authorization for Yamaha licensed dealer to win the contract. The bidders proceeded to report a fraud case at police. Investigations were instituted and one of Paramount Holdings directors, Prakash Ghediah, got arrested at the end of the investigations which established that the company submitted a forged certificate of authorization.
He was later on released on bail and the matter went inactive over the years. When Yamaha wanted to appoint a new dealer in Malawi to replace Stanfield Motors, three local enterprises who qualified for the dealership joined forces to obtain the dealership as a team. The three local enterprises include Creck Hardware and General Suppliers, Luthando Holdings, and Actor Import and Export Agency and they competed for the dealership with Paramount Holdings owned by Indian business gurus in Malawi.
In January 2023, Yamaha Motors expressed concerns about capacities of the local enterprises and reportedly appointed Paramount Holdings as a dealer. However, this move met resistance from local stakeholders. They informed Yamaha that Paramount is not a suitable candidate as its director is currently answering a criminal case that relates to fraud involving Yamaha authorization certificate and was arrested for it. Yamaha eventually retreated by allegedly annulling the appointment.
Upon hearing of the matter and the impending dealership, the Black Indigenous Business Network wrote the Office of the Attorney General urging the government to assist local enterprises in getting dealerships that would assist Malawians get business opportunities and grow the indigenous business sector. Through a letter dated 16th February 2023, addressed to Yamaha Motors, the Malawi Embassy in Japan recommended the three local enterprises for the dealership while presenting their capacities.
Malawi’s indigenous business community proceeded to write Yamaha Motors expressing policy factors inspiring the need to give the dealership to Malawi’s local enterprises. However, Paramount Holdings allegedly received parallel help from other quarters within the Government who convinced Yamaha Motors that Paramount has no criminal case in the courts in Malawi. To augment this claim, Paramount Holdings was assisted to win a number of contracts with the government which were used to convince Yamaha that Paramount is clear of any criminal case. With that information, Yamaha allegedly proceeded to re-appoint Paramount as a dealer.
However, stakeholders who are fighting for promotion of indigenous enterprises have pursued the fight and have informed Yamaha that the criminal case involving Paramount Holdings and its three directors is on-going in Malawi’s Courts.
Luthando Holdings together with Actor Imports and Export Agency further joined forces with Stansfield Motors to seek a court injunction restraining Yamaha from effecting the appointment of Paramount Holdings as the sole distributor of Yamaha products in Malawi.
The High Court sitting in Blantyre has granted the injunction on Thursday, 11th January 2024 binding Yamaha and Paramount Holdings.
“This order restrains you, whether by yourselves, your servants, agents or whosoever other from effecting the decision to enter into a sole distributorship agreement with the 2nd Defendant at the expense of the Claimant”, reads part of the injunction order that this publication has seen.
Meanwhile, further information indicates that Paramount Holdings and its three indicted directors are supposed to appear in Court on 17th January to enter plea for their charges.