… From Vice President through the President’s senior aides to ministers, police chiefs to procurement officers
… Sattar Could Deliver Goods and Steal Them to Make Government Pay Twice
BY PIJ INVESTIGATIONS
Vice President Saulos Chilima makes the list that has several senior government officials including President Lazarus Chakwera’s Chief of Staff, cabinet ministers, senior members of the military and police commands including current Inspector General of Police as part of those under investigation in the United Kingdom by the National Crimes Agency in the ongoing Zuneth Sattar investigation.
President Lazarus Chakwera himself is not directly named, but the said mentioned officials include those in the previous Democratic Progressive Party (DPP) administration who have been named in an explosive affidavit the NCA filed in court as part of Wednesday’s hearing into an application by Sattar to waive bail conditions to allow him to travel to Malawi and the United Arab Emirates.
The Platform for Investigative Journalism has been reporting extensively about the investigations into UK citizen and Malawian born businessman Zuneth Sattar and now has exclusively obtained access to the affidavit which provides insight into alleged corruption behind three multi-billion contracts Sattar signed with Malawi government under both the Peter Mutharika and Lazarus Chakwera administrations between 2019 and 2021.
Those contracts include the supply of 6 water cannon trucks at a cost of US$10½ million (around 8.5 billion), at a profit of US$8,334,300 (around 6.8 billion kwacha) and supply of food ration packs at a value of just over USD35 million (around 28.5 billion kwacha).
The Court affidavit also made chilling revelations based on what it called evidence collected to demonstrate Sattar’s influence and corruption of a number of senior public figures in Malawi “including the Malawian Vice President, Saulos Chilima, the Chief of Staff, Prince Harvey Kapondamgaga, the Malawian Solicitor General, Reyneck Matemba, the Inspector General of Malawi Police Service, George Kainja, a Malawi Police Service Lawyer: Mwambi Kaluba and the Chairperson of the PPDA, John Suzi Banda.”
NCA placed Sattar under covert surveillance, by, among others, placing recording device in Sattar’s office which overheard conversations and telephone calls that Sattar was engaged in; at times, on both sides of a call.
The NCA investigation further uncovered evidence of gifts and payments, inappropriate contact and relationships with individuals involved in the influencing of the awarding of contracts and the placing of orders for excessively high volumes of stock.
The investigation also identified other evidence of corrupt tenders, including a single-source supplier, the absence of a bidding procedure, inflated costs and the unnecessary use of additional companies to justify these inflated costs.
Christopher Convey, a barrister representing the NCA, claimed at the Uxbridge Magistrates Court in London, before Deputy District Judge Daniel Stein, that Sattar is suspected of supplying a number of high-value motor vehicles to officials in Malawi as bribes.
Other explosive revelations include conversations between Sattar and public officials secretly recorded by the NCA as part of a covert operation which revealed, among others, Sattar discussing procurements with public officials including seeking to influence tenders, offering cash and expensive cars, beer and other items to public officials.
On 17th December, Sattar is reported to have a further conversation with someone believed to be the Inspector General of the Malawi Police, George Kainja, he is referred to as “IG”. NCA says Kainja has been identified as being involved in the procurement process within Malawi for contracts supplying goods to the Police Service.
“During the call, “IG” speaks of receiving a gift and that Sattar has something for him. They then discuss an individual believed to be the Minister for Homeland Security in Malawi, Richard Chimwendo Banda. “IG” stated that there was a discussion about the charges being exorbitant, but he intimated that he had dealt with it,” reads the affidavit.
Some public officials are not named in the court document but are believed to be judges, politicians, officials at Malawi Revenue Authority and other public entities including an individual who on 15th December 2020 was recorded having a conversation with Sattar who referred to the individual as “My Lord”. NCA believes the person to be an influential person within Malawi, and Sattar makes a reference to the paying for school fees of the individual and a potential supply of a car.
“Don’t wait for the arrival of the car. We will bring it from here,” Sattar reportedly said.
Further reads the affidavit: “On the 29th March 2021 Sattar is recorded having a conversation with an individual he calls “Senior Castle” or “Senior Counsel”. That person is believed to be John Suzi Banda, who was previously Senior Counsel in a private law firm, but has now been appointed to the Government Board of the Public Procurement and Disposal of Assets Authority (PPDA) of Malawi. Sattar wants to know if his company will receive the tender to supply the police with the rations and public order equipment. Banda responds by saying he will be “passing by some people” inferring that he will find out.”
According to the affidavit, Sattar is suspected of supplying a number of high-value motor vehicles to officials in Malawi as bribes.
“On 28th January 2021 the “Grand Motor Company”, a company belonging to Sattar’s associate, Ebrahim, exported a UK registered Mercedes S C200 motor vehicle, (value c.US$18,367) to Malawi via Tanzania. The recipient in Malawi was a Nason Nelson Kayenda, a Customs Officer with the Malawi Revenue Authority,” reads part of Convey’s written affidavit PIJ has seen. “It is believed that the vehicle was a gift to this customs officer,” it adds.
Following his arrest on the 5th of October 2021, officers searched Sattar’s home address. Recovered was a five-page document entitled Pyrite, “Statement” dated 14th September 2021. Pyrite General Trading is a company owned by Ebrahim that is incorporated in the United Arab Emirates. The “Statement” listed a large number of vehicles, many of which were shown as having been shipped to Malawi. Examples of Supplies to the Malawi Police Service:
Another Food Rations Scam
Under the Peter Mutharika administration, between 15th July 2019 and 24th March 2020 Xaviar Limited purchased at least 1,524,000 “24-hour ration packs” from Serac Nutritional Products (SNP) in South Africa for US$8 each (7 200 kwacha) and sold them to the Malawi Police Service (MPS) for US$ 24.00 each (21 600 kwacha each).
“It is believed that Sattar created invoices between a UAE company called Malachitte FZE, of which he is the sole owner, and Xaviar Limited in order to give the impression that there 7were multiple supply chains to fulfil the contract. The additional company created a buffer through which Sattar had an opportunity to inflate the price ultimately charged. SNP had already agreed to stamp the packs with the name “Xaviar Limited” prior to actual shipping. Therefore, there was no requirement for Malachitte FZE to be involved,” reads part of the affidavit.
The affidavit says the number of ration pack supplies purchased is excessive when compared to the 16 000 strong police force it was intended for.
Under the Lazarus Chakwera administration, Sattar, through Xaviar Limited, obtained another contract valued at US$7,875,000 to supply MPS with 350,000 ration food packs was signed and agreed upon on the 14th of September 2021.
When Sattar, his wife, Ebrahim and others were arrested on 5th October 2021 and their homes and offices were searched, a number of seizures were made but when interviewed under caution, Sattar at first exercised his right to silence and made a no comment to all questions put to him.
However, following a consultation with his solicitor, according to the NCA submission, ‘he chose to answer questions in relation to business invoices that had been shown to him and which the interviewers said were fake. He stated that they were not fake but were used when he received funding from one of his other companies to fulfill a contract from the Malawian government in the name of his company Xaviar Ltd, that Xaxiar Ltd did not have sufficient money to fund’.
NCA told the court that they asked Sattar why he charged the Malawian government US$24 per item for “ration packs” that he had to purchase from a company in South Africa for US$8 per pack and his response was a claim that ‘it was just good business and all profit’.
Sattar denied that the real reason for the large price increase was to cover the bribes and other payments he had to make to obtain and keep the lucrative contract.
“He claimed that it was reasonable, based on what the previous person was charging the government,” Sattar told NCA, apparently.
He also denied all bribery, money laundering and tax offences put to him and stated that ‘if the British government were not happy with him working and investing in the UK, he would move his business and assets elsewhere’.
“It is unclear why, if the contracts were awarded on a genuine arms-length basis, a commercial supplier such as Malachitte FZE would be in possession of such documents,” adds the document.
Expensive Bottled Water
On 17th December 2020, Sattar and Sreedharan, popularly known as Ashok, were recorded discussing the supply of bottled water to the MPS. Among others, they were recorded stating they should add 40,000 to the contract price to cover the expenses of someone called Ahmed.
“They were also recorded discussing a potential fraud whereby they claimed that the supplied goods are stolen after purchase, allowing them to charge the Malawian government twice for the same goods.” adds the report.
On 14th December 2020, Sattar was recorded asking Sreedharan to create invoices between Xaviar Limited and “Xelec” (believed to be another Sattar company, Xelite Strips). NCA believes the move had no legitimate commercial purpose other than to solely justify the movement of monies from one Sattar entity to another.
Xelite Strips provided the MPS with 500ml bottled water at prices between 75 pence and £1.25 per bottle. Enquiries have established that the retail cost of a 500ml bottle of water in a convenience store in Malawi varies from approximately GBP 9p to 33p depending on the brand.
The Water Cannons Deal
Between April and October 2020 Malachitte FZE tendered a bid to supply 6 armoured water cannon trucks to Malawi. According to the affidavit, after PPDA raised an objection to its single sourcing, the contract was eventually issued alongside a contract to Crimson Trading LLC to supply the Malawi Defence Force with Anti-Riot Control Kits. Crimson Trading LLC is a UAE company belonging to Sattar’s associate, Ebrahim, adds the document.
Malachitte FZE purchased six water cannon trucks from a UAE company, International Armoured Group FZE at a total cost of US$2,165,700. Malachitte FZE charged the Malawi Defence Force a total of US$10,524,000 for the same trucks. Sattar’s company was the only one invited to tender for the contract.
“The searches conducted upon Sattar’s arrest on 5th October 2021 led to the uplift of a number of internal Malawian government documentation from his premises. Those documents included letters from the Office of the President and Cabinet and the Public Procurement and Disposal of Assets Authority to the Army Commander, Malawi Defence Force, in September 2020 showing approval for the signing of two contracts for the procurement of anti-riot equipment by the Malawi Defence Force,” adds the affidavit.
Zuneth Sattar (LEFT) is at the centre of a joint investigation by the NCA in UK and the ACB in Malawi
A Lavish Lifestyle
Along with his wife, Tehera, Sattar is believed to have utilized the proceeds of his crimes into some £11 million (around 9.6 billion kwacha) worth of properties in the UK, mostly registered in the name of his UK based company Xaviar Investments Ltd. He is also known to have an apartment in Singapore, in which there is a safe deposit box containing cash.
Sattar also purchased a number of high-value cars, including Rolls Royce, Bentleys, a Lamborghini, a Ferrari and a BMW for a combined value of £1million (around 874 million kwacha). Investigators also seized an unspecified number of high-value watches and jewellery from Sattar’s home, believed to be worth over £½ million (around 437 million kwacha).
The investigation has also uncovered evidence that the Sattars have declared a far lower income than they actually receive, and that they have made fraudulent claims for VAT refunds for goods purchased at UK Airports. The latter payments are not on the same scale as the offences against the people of Malawi. The reclaimed sums being in the hundreds and the low thousands of pounds.
The Platform for Investigative Journalism (PIJ) did not seek comments from any of the individuals mentioned, but its reporting is protected by court privilege. The PIJ is an independent non-profit centre for investigative journalism focussing on cutting edge public interest journalism.