AG tells Parliament PSPTF trustees failed due diligence in Amaryllis purchase
Attorney General Frank Mbeta has told Parliament that trustees of the Public Service Pension Trust Fund (PSPTF) must take primary responsibility for engaging an unqualified firm to conduct the valuation of Amaryllis Hotel Blantyre, a transaction now at the centre of a controversial K128.75 billion acquisition under scrutiny by lawmakers.
Mbeta made the remarks when he appeared before Parliament’s Public Accounts Committee (PAC), which is investigating the pension fund’s purchase of the Blantyre-based hotel amid mounting concerns about the integrity of the valuation process and whether proper procedures were followed.
The Attorney General told the committee that the responsibility for appointing consultants in the deal rested squarely with the pension fund’s trustees, who were expected to ensure that the firms engaged were properly qualified and that due diligence was conducted before any critical decisions were made.
According to Mbeta, the trustees failed to carry out adequate checks when they engaged EMJ Advisory Public Accountants to conduct the valuation of the hotel property. The firm has since admitted before the committee that it is not a registered property valuer, raising serious concerns about the credibility of the valuation that informed the purchase price.
Mbeta said the trustees were in the best position to account for the decision because they were directly responsible for selecting and appointing the firm.
He further explained that his office acted based on the information that was available at the time the transaction was being processed. Among the documents presented to his office was a complaint letter from the Malawi Law Society, which had raised concerns regarding aspects of the deal.
However, Mbeta told the committee that he did not have access to all the relevant facts surrounding the engagement of the valuation firm or the broader details of the transaction when he provided his legal input.
He emphasized that the Attorney General’s office relies on submissions and documentation presented by relevant institutions and officials when offering legal guidance to government and public bodies.
Meanwhile, the Reserve Bank of Malawi (RBM) earlier intervened in the matter by quarantining K70 billion linked to the transaction, effectively freezing the funds amid concerns about the manner in which the hotel purchase was conducted.
The central bank’s action has been widely viewed as a precautionary step intended to safeguard pension funds while authorities review the legality and procedural compliance of the transaction.
But Mbeta raised questions about whether the central bank obtained a court order before freezing the funds, suggesting that such a move would normally require legal authorization. He told the committee that he would need to review the full details surrounding the decision before reaching a definitive legal opinion.
Despite the intense scrutiny surrounding the deal, the Attorney General said the information currently available to him does not point to clear evidence of corruption or collusion.
He cautioned, however, that his position could change depending on the findings of the ongoing parliamentary inquiry, noting that a more definitive assessment would only be possible once all facts and documentation related to the transaction are fully examined.
The purchase of Amaryllis Hotel by the pension fund has sparked widespread public debate due to the scale of the investment and concerns about whether the valuation process was handled professionally and transparently.
Members of the Public Accounts Committee are continuing to question a range of stakeholders, including pension fund officials, financial advisors and government authorities, as part of efforts to establish whether the pension resources of public servants were managed in accordance with the law.
The outcome of the inquiry is expected to determine whether administrative or legal action will be taken against any individuals involved in the transaction.
