After signing a contract based on 2012 LPO, businessman was given billions of taxpayer money in advance to buy military equipment. Now he wants extra pay, described by the military as bogus.

In 2012, the Malawi Defence Force issued an LPO to businessman Shiraz Ferreira to supply various goods to the military through his SF international in a contract worth 24 billion kwacha. There was no contract between the businessman and government until 2017 and Ferreira only partly delivered the goods in 2019. Now Ferreira is in court, demanding that the state pays his company and its lawyers an extra 6 billion kwacha, reportedly for in interest claims. The MDF says the claim is bogus.


In around December, as Malawians rushed for festive season, the High Court entered a default payment ordering Malawi government to pay businessman Shiraz Fereira a total sum of 24 billion kwacha for an ‘interest’ claim his company—SF international had launched at the court.

The Attorney General, overwhelmed by numerous court cases his office handles—according to officials in his office—had forgotten to go to court and defend the claim. The claim involves alleged demand for interest on a contract for supply of military equipment ‘signed’ in 2012 by the MDF and the company.

It’s a curious contract whose details the Platform for Investigative Journalism has now obtained.  The actual contract was signed on 17th December 2017 to supply various military equipment worth $30 million (24 billion kwacha) on the base of the contract is a Local Purchase Order (LPO), the Malawi Defence Force purportedly signed with SF International in 2012.

“Pursuant to the said agreement the claimant (Ferreira) took delivery of the equipment valued in the sum of $8 382, 000.00 leaving the balance sum of $21, 618, 000.00 undelivered as a reason of the Defendant’s Default,” reads the claims as filed by Ferreira’s lawyer Frank Mbeta.

The company is now demanding to be paid interest in the sum of $6, 942, 359.49 (K5, 581, 496, 267) as compound interest and $202, 270.78 (K162 620 407) as legal costs.

When the AG’s office failed to defend the case, Justice Ken Manda entered a default judgement, but the AG later learnt of the development at court and applied to set aside the judgement which on 6th January 2022, the Registrar of the High Court did.

The Genesis

The story goes as far back as 2012, during the Joyce Banda presidency when, according to a letter Mbeta wrote to the office of the AG on 3 February 2020, the MDF issued LPOs to SF International for procurement of various goods.

The contract was finally signed in 2017 and Ferreira delivered the goods in 2019.

“As you may recall, our client entered into a contract with Malawi government for the supply of various military goods to the Malawi Defense Force in December 2012. The contract was negotiated through your office sometime in March 2017. As a result, the last consignment was delivered around 2019. Consequently, over the intervening period, our client has suffered loss through delayed payments thereof. We, therefore, claim the sum of US10, 936 772.24 as net position of interest loss,” reads the letter.

Mbeta’s letter enclosed calculations on the interest and informed the AG their side was available for negotiations on the matter.

Mbeta followed up on the matter with another letter on 20th March 2020, titled CLAIM OF INTEREST BY SF INTERNATIONAL AGAINST MALAWI GOVERNMENT (MALAWI DEFENCE FORCE), notifying the Malawi government that the company had recalculated the interests. The revised claim was now $6 942 359.49 and added $202, 270.78 in collection fees.

According to article 4 of the contract focusing on payments, the total price of the contract is US $21 618, 000.00.

A copy of the contract signed between the MDF and SF International, sourced by the PIJ, however, does indicate that SF international was supposed to be paid after delivery of the materials not before but the contract was designed in a unique—read strange—way.

Government was going to be paying SF International in trenches, according to details of the contract. And SF was going to be delivering its material in trenches.

  • Firstly, the government was to pay SF USD $7 059 000.00 between 1st July 2017 and 30th September 2017.

“The Buyer shall pay to the seller the sum of USD $7 059 000.00 (Seven million and fifty-nine thousand United States Dollars) between the period of 1st July 2017 and 30th September 2017 which sum shall, prior to disbursement, be fully secured by a bank guarantee acceptable to the buyer and upon receipt of which sum the seller, the seller shall, not later than 90 days after the receipt thereof, supply the equipment mentioned in schedule 1 hereto as consideration for the sum received. In the event of failure by the seller to deliver the equipment listed in schedule 1,  or any part of it within the stipulated period, the buyer shall be at liberty to call in the bank guarantee or any part of it as shall represent the value of any undelivered equipment.

  • The second trench would start with SF International delivering first and being paid after.

“Between January 2018 and 31st March 2018, the seller shall deliver to the buyer the equipment in the schedule II hereto following which, within a period of 45 days from completion of delivery, a payment of USD7, 537, 000.00 (Seven million and twenty thousand United States Dollars) shall be paid by the buyer to the Seller,” reads part of the contract.

  • Third round would also start with delivery by SF International followed by payments.

“Between July 2018 and 30 September 2018, the seller shall deliver to the buyer the equipment in the schedule II hereto following which, within a period of 45 days from completion of delivery, a payment of USD7, 022, 000.00 (Seven million and twenty thousand United States Dollars) shall be paid by the buyer to the Seller,” reads part of the contract.

The contract stipulates that any late payment by the buyer shall attract a compound interest of 5 percent per annum, calculated monthly.

The MDF—through the Attorney General—denies delaying paying the supplier and now wants a full trial to challenge SF International to demonstrate the proof that the MDF delayed issuing any payment, according to a document filed by the Attorney General Thabo Nyirenda on 7th December 2021.

The letter by Mbeta issuing the claim does not refer to the specific period in which the delays were made.

Businessman Shiraz Ferreira, owner of SF Internationals is a military supplier who was recently debarred by the Attorney General of Malawi for entering overpriced and expensive contracts with Malawi government that have impoverished the Malawi government.

He was previously arrested by the Anti-Corruption Bureau (ACB) and Malawi Revenue Authority (MRA) but escaped prosecution charges on technicality including an out-of-court settlement in which he paid back to the state money he had dodged to pay through tax evasion.

On 9th February 2015, then Anti-Corruption Bureau deputy director, Reyneck Matemba, swore an affidavit to the country’s High Court, following a complaint from the Commissioner General of Malawi Revenue Authority (MRA), Ralph Kamoto, that private practice lawyer Frank Mbeta offered a K2million (2, 666 US dollars) bribe to MRA ICT Security Officer Wilson Upindi. Mbeta asked in exchange, for Upindi to delete targeted information from three computers that were seized from a suspect of tax evasion, Shiriraz Fererra, a client of Mbeta’s.

Strangely, Mbeta’s other client, Choudhry, also—allegedly—deposited K2 million into a bank account belonging to Director General of the Anti-Corruption Bureau (ACB)—no less— while ACB was investigating the client.

Mbeta accused the ACB director of personalizing issues because his client Choudry had deposited the mysterious K2million, sources at the Bureau told ICIJ.

According to sources familiar with the episode, there were heated SMS texts exchanges between Mbeta and the ACB director.

Both Mbeta and his client, Shiraz Fererra, to date have not been brought to court to answer for any alleged wrongdoing.

“The injunction that Mr. Frank Mbeta obtained against the ACB stopping his arrest and prosecution is no longer there. Through a consent order, the court directed that the ACB should not arrest Mr. Mbeta but commence the case against him through summons. The delay has been due to the fact that the prosecutor who was handling the case is no longer working for the ACB,” Egrita Ndala, a spokesperson for the Bureau, was quoted as saying in September 2020.

Like embattled businessmen Zuneth Sattar and Karim Batawalala, Blantyre-based businessman Ferreira had many contracts with Malawi government, particularly the military and police.