I have learnt with shock that Export Development Fund (EDF), a registered and incorporated financial services company, has been operating without a licence for nine (9) years.
This came to light during a Public Accounts Committee of Parliament hearing held with senior officials from the Reserve Bank of Malawi (RBM) on Wednesday, 1st September, 2021.
Under the Financial Services Act and other relevant legislation, no company can conduct financial services business in Malawi unless RBM has given that company a licence to operate as a financial institution.
It is suspicious; therefore, that RBM, which is the financial services regulatory body, allowed EDF to operate for close to a decade without a licence, especially considering also that RBM holds 100 percent shares in EDF.
One wonders whether this was a deliberate attempt to flout the law, for whatever reasons, or that it was pure negligence on the part of RBM Board of Directors and top management. I would have expected RBM to be above reproach in terms of morality in managing this matter right from the beginning.
Indeed, the Reserve Bank is supposed to have unquestionable integrity as a regulator in this business.
Therefore, I wish to call upon the Financial Intelligence Authority (FIA) and other relevant agencies to thoroughly investigate this matter to establish what may have caused this apparent disrespect for the law.
Meanwhile, I have received information pertaining to alleged irregular and unprocedural appointment of the current Export Development Fund Chief Executive Officer (CEO), Mr. Gerald Nsomba.
According to the gathered information, the CEO position was advertised in the local press in February 2017 but no interviews were conducted and no-one was employed.
It is alleged that the current EDF CEO was employed in 2020 without following the laid down procedures of Reserve Bank of Malawi Group and its subsidiary, Export Development Fund, which demand a merit-based competitive selection process.
It is also alleged that the said CEO does not possess the prerequisite qualifications for the job contrary to the RBM Group Human Resource Policy, which prescribes a relevant Master’s Degree and at least 10 years’ experience as Head of Department.
I, therefore, wish to call upon the Public Appointments Committee of Parliament to immediately investigate this matter.
Honourable Kondwani Nankhumwa, MP
LEADER OF THE OPPOSITION IN PARLIAMENT
2nd September, 2021
Nakhumwa trying to seek attention
Train your mind to perceive sense beyond your political party inclinations. Corporate governance issues are very crucial for a company owned by a regulator.