• November 29, 2022 6:00 pm

We reveal how DPP killed ADMARC and abused other parastatals 

Sep 26, 2022

An all inclusive audit which Graham Carr Audit Film conducted has revealed how the Democratic Progressive Party (DPP) pushed  aroumd and abused Agriculture Development and Marketing Corporation (ADMARC).

This shows how cruel DPP was by abusing Government owned property.

The report among others revealed that ADMARC Limited has been paying insurance for non-runner vehicles costing the company almost MK18,880,767.00.

According to the  Report, ADMARC Limited paid insurance premiums for Ocean Car Hire for hired vehicles amounting to MK453,959.00.

This was done even though the car hire agreement and charges already covered the insurance.

The report further revealed that ADMARC lost close to K330 million to fraud and abuse masterminded by employees through bogus medical cover claims and dubious staff loan schemes.

Graham Carr carried out the investigative audit between July 2020 and March 2022. The investigations looked at various schemes, projects and programmes of the company and how they were managed in relation to standing operation procedures and policies.

Further the investigation tried to identify people behind any breaches of these procedures and policies.

The ADMARC Board sought the services of the audit firm after noting that the financial performance of the company continues to nosedive inspite of concerted interventions by the government, the board and the executive management of the company.

The audit report says at the watch of the Democratic Progressive Party (DPP) govenrment, ADMARC paid insurance for motor vehicles duplicated on the portfolio amounting to MK156, 984.00 and insured vehicles for non ADMARC staff amounting to MK828, 915.00.

“From the findings above, it can be observed that there is deep routed corporate fraud that has been happening in ADMARC. No single member of staff whose vehicle was insured could cause an alarm to say you have not recovered insurance deductions from my payroll.

Staff in the finance department failed their duty by not recovering insurance payments from staff. One contributing factor is that they were also conflicted as their names were on the list as well. There was complete lack of expected standard of internal controls in relation to recovery of insurance loans from staff,” reads part of the report.

Additionally, the audit reports says, ADMARC paid MK534 million as medical aid cover against what it indicated as expected payments on their payroll of MK417 million.

The auditors say this shows that there was lack of proper reconciliation between the amounts on the MASM manifest to what ADMARC payroll staff had posted in the system and that this also contributed to the under deduction or deliberately not recovering MASM contributions for staff and their beneficiaries from the payroll.

“ADMARC paid an amount of MK15, 854, 000 to MASM for the 21 months period on behalf of beneficiaries who have been identified as undeserved, deceased MK1,572,000, out of employment MK6,728,000 and non ADMARC staff MK15,854,000,” it states.

Meanwhile, the ADMARC Board has announced that 3,122 employee are set to lose jobs through retrenchment, an exercise the corporation’s board says is part of its restructuring drive.

The decision to retrench the entire workforce comes barely days following the release of the audit report which revealed fraud and abuse masterminded by employees.

According to a letter dated September 15 2022 by immediate past ADMARC Board chairperson Alexander Kusamba Dzonzi all employees will be retrenched because the company is not performing.

It reads: “Over the years, Admarc has been poorly performing such that it has accumulated debts that are now choking its operations. The company now has more liabilities than assets.

“The company has a huge wage bill that is not supported by the company’s revenue base and business model such that it has been the shareholder paying for the employees’ salaries and other statutory obligations for years.”

It adds: “Admarc intends to retrench all employees since the company has been completely restructured. The retrenchment exercise will be carried out in a phased manner and all guidelines for the retrenchment process will be followed.”

Dzonzi in an interview yesterday confirmed the letter which has been addressed to the company’s workers union, but he could not provide further details, arguing: “I cannot say much because our tenure expired. But we also served that letter to the Secretary for Agriculture as well as the Ministry of Labour. You should understand that this is what our board was doing before the expiry of our tenure.”

ADMARCH is one of the parastatals that have been struggling financially and has over the years failed to serve Malawians as per its mandate as produce stabiliser and provide ready markets for farmers. ADMARC has also failed to perform its social function as government’s food security apparatus.

According to the 2021 Malawi Government Annual Economic Report, as at half year of the 2021/22 financial year, ADMARC recorded a net loss-after-tax of K3.7 billion.

The report further states that ADMARC has been surviving on overdrafts and bank loans, which has been a setback to its growth.

Until 1987, ADMARC was the sole buyer of smallholder produce, but in 2004, it was incorporated as a limited liability company with the government owning 99 percent of the shares.

DPP also made the same abuse at ESCOM , EGENCO and all other parastatals.

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