Mastermind of Malawi’s biggest ever financial scandal sent to jail—his stealing helped a president lose her job

'Cashgate' scam was central to the election that saw off Joyce Banda. Oswald Lutepo was handed 11 years, but says will appeal

MALAWI’S high court Friday sentenced former senior official Oswald Lutepo to 11 years in jail for his role in the “Cashgate” corruption scandal that led to a cut in foreign aid to the poor country.

Lutepo, one of the country’s richest men, was the chief suspect in the fraud, which was the biggest financial scandal in Malawi’s history and helped push former president Joyce Banda out of power at last year’s elections.

“The convict will serve a total of 11 years in prison,” Judge Redson Kapindu said in his ruling, adding that the scandal had a “bad impact on Malawi society and those responsible should be held to account.”

He said Lutepo, 37, was “clearly a major player in this grave economic crime against the people of Malawi.”

Lutepo, who had previously pleaded guilty to defrauding the government of $9.3 million (8.3 million euros), looked composed as the sentence was handed down, and said he would appeal.

“The judge has been inconsiderate, because I pleaded guilty on my own undertaking,” he told news wire AFP in the heavily-guarded court.

“That should have been considered.”

Lutepo was given eight years for money laundering and three years for conspiracy to defraud the state due to “the exceptional gravity of the offences and the gigantic sums of money involved,” the judge said.

“I have found no single case of such huge proportions in Malawi,” he added.

Lutepo, who accuses Banda of being behind the scandal and of “using him”, was arrested in 2013 on suspicion of pocketing money from government coffers through ghost companies which did not provide any services to the state.

Lutepo was a senior party official in Banda’s People’s Party as well as a wealthy businessman.

Banda, who denies any role, welcomed the sentence, saying she had no regrets over her handling of the affair, which she said preceded her term in office. Malawi needed to do more, she said on Friday.

“As has been seen it is hard to fight corruption. In the end it is hard to know if you are a victor or a victim.”

The scandal, which originated in 2005, prompted foreign donors—who provide around 40 percent of Malawi’s budget—to pull the plug on aid worth around $150 million.

An audit ordered by Banda found that $30 million had been looted by officials in less than six months in 2013.

Dozens of civil servants, business people and politicians have been implicated in the scam.

Four people have now been jailed.

A stunt
“I am happy with the verdict… this is what I expected,” Reneck Matemba, deputy head of the Anti-Corruption Bureau which was prosecuting the case, told AFP.

Lutepo attended court in a wheelchair saying he was too unwell to walk but the judge dismissed his claim, while the country’s media termed it a “stunt”.

President Peter Mutharika, who replaced Banda, has vowed to tackle corruption and pleaded for foreign donor nations to support the country.

Stella Phiri, a housewife who waited for five hours outside the court during the sentencing, praised the judge for “meting out a stiff penalty.”

“Malawians are suffering because of such people who looted public funds meant for development,” she said.

John Kapito, head of the Consumers Association of Malawi, told AFP the ruling “sent a strong message against to everyone who play around with public funds.”

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