Governor Charles Chuka Must Be Fired for Incompetence, Collusion. Reserve Bank of Malawi is the heart of Corruption, Maladministration. RBM Facilitates International Money Laundering – The Baker Tilly Forensic Audit Report revealed.
Charles Chuka is the current governor of the Reserve Bank of Malawi. He is also currently the Chairman of the Association of African Central Banks. Since becoming the Governor of Malawi’s Central Bank, in April 2012, he has announced a series of reforms to allow for foreign exchange to enter the country.
Baker Tilly, the British based Audit firm which was appointed by the British Government to unmask Cashgate mysteries has a different view of the Organization led by a man with such eye-catching profile.
The Forensic Audit Report on Fraud and Mismanagement of Malawi Government Finances exposes the jaw-dropping incompetence at the Central Bank. In some instances, the Report reveals Reserve Bank efforts to conceal information from the Auditors.
The grounds for dismissal of Governor Chuka are fully narrated in the Report. Charles Chuka must see the exit door with immediate effect. He must also be on the waiting list for possible prosecution. Governor Chuka must be held personally liable for the massive corruption and money laundering RBM has facilitated to take place with impunity.
Baker Tilly Forensic Audit Report takes the battle to the Reserve Bank of Malawi:
- During our field work we noted significant sums of Malawi Kwacha being withdrawn in Cash (often significantly higher than the cash holding insurance limits of the commercial banks) in short periods of time from the commercial banks.
- It appears that the banking system failed to identify these unusual transactions with a Limited number of Suspicious Transactions Reports being sent to FIU
- We believe that these levels of withdraws would increase the cash calls that should have been identified as unusual by the Banks and the Reserve Bank.
There is ample evidence to suggest that Governor Charles Chuka has no clue of the Role of the Organisation he is heading. The Forensic Audit Team had to remind him and his team the Role of the Reserve Bank of Malawi. They quoted:
- RBM operates Law Chapter 44:022. One of its principal objectives being Part III 4 (b) to act as a bank and advisor to Government. The Advisor element suggesting active and not passive involvement in managing client funds availability.
The standing agreement between RBM and Malawi Government was quoted as follows:
We note the MOU at 10.1.2(2) states that the Bank in collaboration with Government shall ensure that no fraudulent cheques are cleared in the system.
On Relegation of Duties
- We have particular concerns that High Value Cheques including those with exact values on consecutive cheque numbers were withdrawn on the same day. No evidence has been provided to show that these payments were, at any stage, stage challenged.
- WE believe these high value transactions could have been stopped were they subjected to robust secondary checks.
- The RBM has informed the Audit Team it has no involvement in the qualification of payment and all cheques printed in the system are honoured regardless of available funds.
The Cash-gate has all the hallmarks of theft of public funds sanctioned by the highest authority in the country. The Reports says, this was a well planned operation not an opportunistic occurrence.
One glaring evidence. They encountered unusual conduct for any Central Bank, the conduct that points to collusion and criminality within Reserve Bank of Malawi. RBM was caught red-handed as they attempted to conceal information by leaving out delinquent transactions:
The Report says:
On Concealing Information : We were initially provided with Bank statements by the RBM in electronic format whose extraction was not independently supervised by the audit team. In addition we requested extraction of the same data under supervision. A comparison exercise was undertaken between the unsupervised and supervised statements not a small number of transactions missing between the two datasets and differences in the opening and closing balances.
The blistering indictment reads:
On Collusion We understand that all Cheques payments over MK2, 000,000 (previously MK5,000,000) prior to Cash-gate ) require three signatures to allow the Reserve Bank to process payment. In our sample of 352 transactions, 18 transactions with values between MK13,146,500 and MK209,490,311.20 contained only two signatures. All were honoured by RBM.
This was neither oversight nor incompetence on side of RBM. This was collusion laced with pure criminal intent to defraud Malawi government.
What would be an embarrassing incompetence and complete relegation of duty reads:
On Incompetence A cross-check between the RBM list of Bank accounts and the list provided by the Accountant General’s Department was noted to be out of date suggesting that they were not aware of the number and types of accounts for which they were responsible.
The Reports details international transactions where huge sums of money moved in and out of the country yet without supporting documentations.
There is no single international transaction that can legally happen in Malawi without the knowledge of and or authorization by RBM. How such transactions took place is simply another reason Governor Chuka must go and also be prosecuted.