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Pandora Papers: Malawi’s First Capital Bank owner Hetesh Anadkat banked his money beyond tax collectors – The Maravi Post

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First Capital Bank owner Hetesh Anadkat is one of the most high profile Malawians named in the leak

BY GOLDEN MATONGA & GREGORY GONDWE

Hetesh Anadkat, one of the richest Malawians and owner of First Capital Bank, runs offshore accounts in tax havens beyond the reach of Malawi’s tax authorities, The Pandora Papers, the biggest leak of documents on financial secrecy has revealed.

The Pandora Papers— an investigation by the International Consortium for Investigative Journalists (ICIJ) and partners across the global including Malawi’s Platform for Investigative Journalism (PIJ) and Nation Publications Limited—lays bare the global entanglement of political power and secretive offshore finance.

Based upon the most expansive leak of tax haven files in history, the investigation reveals the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 country leaders. 

Ambassadors, mayors and ministers, presidential advisers, generals, and a central bank governor appear in the files.

Several global leaders, celebrities, criminals, and business persons have been named in the cache of documents received by the ICIJ which have been shared with its partners and among the Malawi-connected individuals, some of the highest-profile include businessman Hetesh Anadkat and wife Meeta.

The Anadkat family is the owner of First Capital Bank and has stakes in other companies in the country and beyond including Letshego Holdings is a microfinance holding headquartered in Gaborone, Botswana.  

Others found in the leaked data are business persons whose dealings with Malawi government in particular had been subject of corruption investigations for years.

Hitesh and Meeta Anadkat, whose family owns First Capital Bank, is revealed to have been joint owners of a company called Reid International Limited incorporated in British Virgins Island (BVI), a tax haven, in 2010.

First Capital Bank owner Hetesh Anadkat is one of the most high profile Malawians named in the leak

The documents show Reid International Ltd made payments to Premier Capital (Mauritius) Ltd which owns First Capital Bank. In 2014, Reid International Ltd borrowed $750,000 from Falcon Private Bank in Zurich, Switzerland, the documents further indicate.

According to a 2010 letter from Clariden Lieu Bank, Meeta and Hitesh Anadkat had a bank account with CLARIDEN LEU, a private bank in the United Kingdom.

In registering the company, Reid International Ltd used nominee shareholders and directors, a tactic used by company owners seeking to hide ownership or avoid tax obligations, according to finance and tax officials ICIJ spoke to.

Anadkat, one of Malawi’s richest businessman in an interview said his use of shell company or offshore accounts was necessitated by the needs of doing business across the world.

In 2017, the previously Malawi Stock Exchange (MSE)– Listed FMB (before rebranding to First Capital Bank) disclosed intentions to transfer their shares in FMB to Mauritian based FMB Capital Holdings Plc (FMBCH), a move the will see the FMBCH listing on the MSE and FMB delisting on MSE.

Mauritius is regarded as a tax haven and had just signed tax treaty with Malawi. FCB was also just following a trend by other companies on the continent including Malawi Mangoes. 

Malawi Mangoes was incorporated in the United Kingdom in 2009, according to financial records filed in London. This U.K. entity was dissolved in 2015. By then, Malawi Mangoes had incorporated two companies in Mauritius (in 2012 and 2013), under the island’s global business system. In other words: Mauritius didn’t facilitate the company’s entrance into Malawi. It had already happened.

The ICIJ documents suggest the Anadkat family—the owners of the bank—has been benefiting from tax havens longer.

In an interview, Anadkat, however, refused to comment on whether he had received tax advice and decided to open the accounts to pay less tax to Malawi authorities.

He insisting he was among the highest taxpayers to Malawi.  “I pay my taxes to Malawi. I perhaps pay the highest taxes in Malawi. It’s how the international system works, I have international companies and I have offshore accounts. I cannot give you more insights than you have,” he said in an interview.

“I have not done anything illegal. I have a British passport. I am a legitimate businessman. I don’t see the need why I should be which are often is used to obscure the ownership of a shell company,” said Anadkat.

Tax havens allow the rich to get away with paying little taxes which means the poor end up picking up the shortfall in government revenue through punitive tax regimes, according to experts.

Rachel Etter-Phoya, a Researcher working for the Tax Justice Network (TJN) in an interview argued that the veil of secrecy provided by tax havens and shell companies aid companies to milk the country while paying back little in returns.

“Malawi’s Registrar General must have the legal mandate to collect and verify information on who really owns and benefits from the activities of companies and trusts. We have a new order in Malawi that is set out to help small businesses, and businesses owned by women, young people and people with disabilities to supply goods and services to government,” said Etter-Phoya.

She adds: “Yet without knowing the ultimate beneficial owners and without having adequate sanctions for those who lie on declarations, dishonest big businesses may just use other people to front companies.” 

An ICIJ analysis of the secret documents identified 956 companies in offshore havens tied to 336 high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors and others. More than two-thirds of those companies were set up in the British Virgin Islands, a jurisdiction long known as a key cog in the offshore system.

At least $11.3 trillion is held “offshore,” according to a 2020 study by the Paris-based Organization for Economic Cooperation and Development. Because of the complexity and secrecy of the offshore system, it’s not possible to know how much of that wealth is tied to tax evasion and other crimes and how much of it involves funds that come from legitimate sources and have been reported to proper authorities.

The Pandora Papers investigation unmasks the covert owners of offshore companies, incognito bank accounts, private jets, yachts, mansions, even artworks by Picasso, Banksy, and other masters – providing more information than what’s usually available to law enforcement agencies and cash-strapped governments.

People linked by the secret documents to offshore assets include India’s cricket superstar Sachin Tendulkar, pop music diva Shakira, supermodel Claudia Schiffer and an Italian mobster known as “Lell the Fat One.”

The Pandora Papers investigation is larger and more global than even ICIJ’s landmark Panama Papers investigation, which rocked the world in 2016, spawning police raids and new laws in dozens of countries and the fall of prime ministers in Iceland and Pakistan.

The Panama Papers came from the files of a single offshore services provider: the Panamanian law firm Mossack Fonseca.

The Pandora Papers shine a light on a far wider cross-section of the lawyers and middlemen who are at the heart of the offshore industry.

The Pandora Papers provide more than twice as much information about the ownership of offshore companies. In all, the new leak of documents reveals the real owners of more than 29,000 offshore companies.

The owners come from more than 200 countries and territories, with the largest contingents from Russia, the U.K., Argentina and China.

Source: https://investigativeplatform-mw.org

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Malawi’s Parliamentary conservation caucus wants Kenyatta road construction be stopped for flouting law – The Maravi Post

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By Dorica Mtenje

LILONGWE-(MaraviPost)-Malawi Parliamentary Conservation Caucus (MPCC) in collaboration with Movement For environmental Action (MEA) has urged Malawi Environmental Protection Authority (MEPA) to cease Kenyatta drive road activity until the proper diligent Environmental Social Impact Assessment (ESIA) is done with transparency.

The two want the process to follow proper procedure and must map way forward with all relevant authorities.

MPCC Chairperson Welani Chilenga told journalist in Lilongwe on Tuesday during the media briefing on environmental and social justice.

Chilenga said the six lane road has cause the cutting down of tress carelessly hindering the environment.

“For accountability of the failure of the Roads Authority officials and consultants to respect procedures whether deliberately or by negligence,let the law take its course,” said Chilenga.

He said failure for MEPA to stop the construction project MPCC will use its power invested in them .

Chilenga said currently the construction has caused the cutting down of almost 1000 trees

Concurring with MPCC chairperson, MEA Environmental Assistant said if not law are to be implemented environment will be preserved.

MPCC was established in 2015 deliberately to deal with issues without following parliament procedures.

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Busted! United Arab Emirates territory thwarts ACB probe on former Malawi leader Joyce Banda – The Maravi Post

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………….Dubai difficult jurisdiction to cooperate with investigations

Malawian former President Joyce Banda and the Dassault Falcon 900EX jet

By Platform investigative Journalism Reporter

The United Arab Emirates (UAE) is proving to be the stumbling block for Malawi’s Anti-Corruption Bureau (ACB) to advance with investigations on former President Joyce Banda’s charity Mudzi Transformation Trust (MTT) over a K3.7 billion ($4.5 million) donation allegedly received from oil companies – on a day government issued oil exploration licenses on Lake Malawi.

The graft-busting body launched the probe in 2017 after it established that United AAEs’ companies had made some payments to MTT.

Former President Bingu wa Mutharika

Between 2012 and 2014, former presidencies of Bingu wa Mutharika and Joyce Banda, awarded six petroleum exploration licences.

The telling one happened eight days before the 2014 elections that booted Banda out of the presidency when her government entered production-sharing agreements with RAK Gas MB 45 – a subsidiary of the United Arab Emirates’ state-owned RAK Gas registered in the secrecy jurisdiction of the Cayman Islands.

The deal was reached before any proven oil discoveries.

Unusual Wire Transfers

According to the records of the Reserve Bank of Malawi, RAK Gas made an unexplained payment of $235,700 (89-million Malawi kwacha) to the Reserve Bank’s account for the government’s mines department before the exploration licences were handed out.

The unusual wire transfer was picked up and queried by independent consultants LBN Strategies of Cologne, Germany, and Lilongwe-based Resources M&E while examining the Reserve Bank’s accounts as part of a scoping exercise for government.

ACB is trying to establish why there was this pre-election payment by RAK Gas to Banda’s MTT, which built or renovated houses for the poor in Malawi.

The ACB was tasked to carry out the probe with request from a range of Malawian civil society organisations and international NGO Oxfam.

At the time the then Banda’s spokesperson, Andekuche Chantunya, told the Mail & Guardian that the donations were part of the company’s corporate social responsibility programme.

The then ACB Director Reyneck Matemba told legal affairs committee of parliament, in May 2018, that they had identified $1 million (about K800 million) to have come from Rak Gas Limited. Matemba said in total, they were investigating about $4.5 million which was allegedly given to MTT.

Current Progress on the Case

ACB director Martha Chizuma

Asked about the progress – the new ACB director Martha Chizuma conceded that the bureau has not made progress on this investigation because of security risks to officers.

Chizuma said: “In this case for the bureau to get to the bottom of this matter it needs to interview RakGas a company fully owned by the government of Ras Al Khaimah, United Arab Emirates.

Precedents have it that such tasks are operationally challenging but also a security risk to the officers assigned to carry out of the work”.

Before Chizuma got to her new position – the bureau’s publicist – on two occasions also said the same that the investigation on this matter had not moved an inch because the UAE is a difficult terrain for a foreign agency to do an investigation.

UAE Difficult Jurisdiction

“The UAE is such a difficult jurisdiction to cooperate with investigations. We tried to use our cooperation with other foreign agencies to break through but even they too have problems with the UAE. Investigations in such jurisdictions are done at your own risk.” explained Ndala – giving no hope if the bureau will pursue the matter some more.

But according to Chizuma the case has not been dropped and “investigation remains open” and hopes that at some point they will be able to get to the root of this matter.

A former official from the bureau, who did not want to be named, while agreeing that the UAE is indeed a difficult place for investigation, said the bureau cannot afford to abandon the investigation but find alternatives.

The source said the other way would be to pin-down those who managed MTT and government officials to establish – the relationship between the donation and the issuance of exploration licenses. The source indicated that the manner in which the bureau has handled the case demonstrates cowardice.

“The truth of the matter is that the bureau does not want to shake a foreign government – especially a powerful one like the UAE. But in the interest of justice the bureau ought to have a plan B – write to this government and seek their cooperation, if that does not work surely, they can seek help from other international agencies to help.

“This issue happened in 2013, the more time we get the more complicated it becomes. Evidence is sometimes lost along the way; this is why the bureau should always move with speed” explained the former official who is familiar with the investigation process at the bureau.

Matemba, at the legal affairs meeting, said they had found some interesting connection between the donation and the issuing of licenses.

Former ACB Director Reyneck Matemba

Said Matemba: “We found that there were intriguing coincidences in the payment made to the trust, on the very same day the licenses were issued to Rak Gas, an amount of $1 million was paid to Mudzi Transformation Trust. To date, there is an accumulated $4.5 million which we are investigating”.

Last year the Human Rights Defenders Coalition {HRDC) wrote the ACB to probe some mining deals including the issuing of oil exploration licenses. The HRDC suspects ‘high-level’ corruption in the manner mining licenses are issued and some of the firms that the HRDC wants the ACB to investigate are from UAE.

A Case of Oil Exploration

The oil discoveries in lakes in Chad, Sudan, Kenya and Uganda, which form part of the East African Rift system, have aroused interest by oil companies to explore for oil and gas in Lake Malawi which is also located within the same Rift system.

Malawi already demarcated six oil exploration blocks which were awarded to different firms with Block 1 held by South Africa’s SacOil Holdings, and UAE based Hamra Oil holds the licence for Block 2 and 3, Rak Gas MB45 for Blocks 4 and 5 while Pacific Oil acquired the licence for Block 6.

A leaked legal opinion from former Attorney General, Kalekeni Kaphale, in 2015, suggested that some of the licences should be revoked.

This was because three of the concessionaires, RAK Gas, Pacific Oil and Hamra oil, were connected by “a thin corporate veil” apparently intended to circumvent the rule that one company could not hold two contiguous blocks.

In an analysis of the contracts published in February 2017, entitled “Malawi’s Troubled Oil Sector: Licences, Contracts and their Implications”, Oxfam objected that “if oil exploration is successful, the agreements could be in place for 30 years covering exploration, extraction, and closure. These agreements give Malawi a raw deal and an incoherent fiscal package”.

When Peter Mutharika defeated Banda in the 2014 elections to become President, Oxfam and its local civil society partners asked him not to endorse oil exploration in Lake Malawi, saying there were many grey areas that needed to be cleared up.

They argued that given the purported irregularities around the initial signing of the contracts, the ongoing ACB investigation, the absence of transparency in the renegotiations being led by the Minister of Agriculture, Irrigation and Water Development, the lack of a clear petroleum policy, an updated Petroleum Act, a completed model contract and comprehensive financial modelling, we are calling on the President not to approve the exploration.

Mutharika did not listen to the pleas and there was nothing the organisations could do since Malawi’s Petroleum (Exploration and Production) Act, passed in 1983, vests all oversight powers in respect of petroleum products in Malawi in the President, although it also empowers the responsible minister to conclude agreements.

Mutharika told the Mining in Malawi newsletter that exploration will go ahead.

“Using the available technology, we will get results similar to those obtained through offshore drilling,” he was quoted as saying.

Failure to conclude Ex-presidents Probes

Former President Joyce Banda

Apart from Former President Joyce Banda’s initiative probe, the ACB is also investigating immediate past President Peter Mutharika in relation to abuse of his tax pin.

The ACB is also prosecuting former President Bakili Muluzi over some K1.7 billion he received in his personal account from foreign agencies when he was President of Malawi. Muluzi’s case has been going on for the past 16 years.

Source: https://investigativeplatform-mw.org

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𝐌𝐚lawian man in Dedza 𝐚𝐫𝐫𝐞𝐬𝐭𝐞𝐝 𝐟𝐨𝐫 𝐚𝐭𝐭𝐞𝐦𝐩𝐭𝐢𝐧𝐠 𝐭𝐨 𝐫𝐚𝐩𝐞 𝐬𝐢𝐬𝐭𝐞𝐫 – The Maravi Post

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LILONGWE-(MaraviPost)-The Police in Dedza district have arrested a 22-year-old man on allegation that he attempted to rape his 24-year-old sister.

The suspect has been identified as Sitifano Yosefi who hails from from Chimpikizo village, Traditional Authority (T.A) Kamenyagwaza in Dedza District.

A statement signed by Cassim Manda, Dedza police deputy Publicist, it is alleged that, on October 10, 2021, the victim whom police have not mentioned decided to go to bed after she got tired of waiting for her husband who was not at home at that particular time.

As the victim was fast asleep, she felt that someone was caressing her body only to realize it was her brother who insisted felt attracted to her.

Having learnt of that, the victim screamed and before people came to rescue, her brother had managed to run away.

The matter was then reported to local authorities who referred the issue to police where the law enforcers say he will face indecent assault charges.

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