‘Cashgate’ suspect held in Malawi

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Blantyre -

A chief suspect in Malawi's “Cashgate” corruption scandal, who was a high-ranking official and financier of ex-president Joyce Banda's People's Party, was arrested by police on Sunday.

Oswald Lutepo was held days after sending a letter to the Attorney General claiming he was threatened and told not to implicate Banda in the “Cashgate” allegations, the biggest financial scandal in the history of the small southern African country.

“Yes, Mr Lutepo has been re-arrested and he will be charged for perjury,” police prosecutor Rodwel Ziyaya from Kasungu district in central Malawi, told AFP.

Lutepo was arrested in November last year for money laundering after he allegedly pocketed $6 million from government coffers through ghost companies which did not provide any services to the state.

“Cashgate” erupted after an audit ordered by former president Banda found that $30 million in state funds had been looted by officials in less than six months last year.

The scandal led international donors to suspend $150 million in aid to Malawi, where half of its 15 million people live below the poverty line.

In his letter, which was also addressed to Western embassies, Lutepo claimed he was “warned against linking Cashgate to the (former) head of state, her family and the People's Party”.

He also said that he was threatened and told to “implicate” former justice minister Ralph Kasambara in the shooting of budget director and corruption whistle-blower Paul Mphiyo last year, the incident which sparked “Cashgate”.

New president Peter Mutharika has vowed to get to the “truth” of the crisis, which is said to have originated in 2005 when his late brother was the country's leader.

Banda, formerly vice-president to Bingu wa Mutharika who has always denied any wrongdoing, became president after the sudden death of Bingu in 2012.

She was defeated in a hotly-contested presidential election in May.

In February this year, a report by British auditors - commissioned by Banda - showed that $30 million had been stolen from the government within a six-month period last year. - Sapa-AFP


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