Malawi: Court convicts couple over K5 billion forex externalisation

High Court Judge Chifundo Kachale Friday found a couple, Treaser Kaiya Guta and Peter Kaiya Guta, guilty on counts of money laundering and forex externalisation amounting to US$6 million (about K5.1 billion).

Kachale has since revoked their bail. The judge has asked the State and the defence lawyers to submit to the court within five days on whether a fine or custodial sentence is the way to go.

The two were found with a case to answer on three counts.

But Kachale has chided what he called the sloppiness and attitude of the banks that were involved in the process saying their conduct contributed to the commission of these crimes.

The two have been found guilty for using foreign currency for a purpose different from the one specified –which was contravening Exchange Control Regulations.

The charge says the accused, between May 7, 2016 and February 8, 2019 at Ned Bank and New Finance Bank in Lilongwe used foreign currency amounting to US$ 6,011,500 as business allowances for their purported employees, for a purpose different from what was specified.

The two are also accused of making false statements in writing to Ned Bank and New Finance Bank in

their application letters for foreign currency that they were applying on behalf of their employees who were

travelling to South Africa by bus.

The third count was money laundering.

Last week the High Court revoked bail for Treaser for failing to attend the judgment. “I am revoking her bail immediately, because she has failed to respect one of the bail conditions,” Kachale said.

During the hearing, defence lawyer Geoffrey Taumbe pleaded with court for leniency, arguing that Treaser was attending to an urgent matter in Zomba. The State was jointly prosecuting the matter with the Reserve Bank of Malawi.

Director for Public Prosecutions (DPP) Steve Kayuni said the State was pleased with the outcome. “We are glad that the court has agreed with us on this trial. As law enforcement agencies, we are jointly, and in a coordinated fashion, moving forward with the fight against financial crimes as they are a serious sabotage to the economy.

RBM [Reserve Bank of Malawi] and DPP officers did a great job on this matter,” said Kayuni. In February 2019, RBM reported that illegal externalisation of foreign exchange and transfer pricing cases had drained as much as K500 billion as at the close of 2018.

The money, according to RBM, came from unsupported foreign exchange transactions remitted without imports being returned into the country to various countries.

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