BoZ lied to court

Mon, 10 Dec 2012 15:07:38 +0000

Monday December 10, 2012

The Bank of Zambia lied to courts of law when it claimed that Access Financial Services was insolvent when it was taken over in 2003.

An internal audit has revealed that as at 13th January, 2003 total assets were almost K16billion while liabilities stood at K10billion.

Insolvency was the strongest reason advanced for taking of the AFSL.

In contrast by October 2011 the Boz had run down the company into insolvency with total assets  reduced to nearly K5billion while liabilities had mounted to more than K12billion.

Most of the money had either been stolen or mismanaged, while other assets including vehicles  sold and proceeds not accounted for.

The Bank is now agonising on how to reconcile the severe mismanagement occasioned when the firms were sequestrated by the Task Force on Corruption.

The BOZ report admits “AFSL was solvent when the Boz took possession in 2003 but the consolidated position of AFSL and ALL has since culminated into an insolvency situation.”

The report notes that Mr. Marshall Mwansompelo who was appointed as the Manager by the Bank and worked with the Task Force on Corruption appointed by President Levy Mwanawasa, was better placed to provide answers on the financial scandal.

Mr. Mwansompelo has already been charged internally for various offences but there is a dilemma in the Bank.

The Banks’ Lawyer Dr. Leonard Nkole Kalinde has expressed reservations about charging Mwansompelo “ I am of the considered view that proceeding with the discipline any hearing against Marshall in the manner envisaged may actually hand the opposition the “smoking gun” they are looking for to confirm their allegation that Bank of Zambia mismanaged the liquidation of AFSL and ALL. This could result in unfavourable judgment against the Bank reality in colossal sums of money. Any adverse findings against Marshall will confirm their allegations and will compromise the Bank’s defence in court where we are arguing that there was no mismanagement of the liquidations of AFSL and ALL.”

This advice from the lawyer clearly shows that BOZ have been deliberately lying to the court. The Boz‘s own internal audit report  on the liquidation of AFSL and ALL reveals that there were weaknesses in oversight from the BOZ on non-compliance with the Banking and Financial Services Act (BFSA) which included the lack of oversight and control of the liquidation process as no periodic returns were submitted to the BOZ or reports made to the liquidation committee on the management of the AFSL and ALL liquidation

Additionally “the filing of the liquidation schedule for AFSL and ALL and the notification about the liquidation to the stakeholders were not done in line with the provisions of the BFSA”.

The report also notes that  “A serious failure within the liquidation process is almost certain to involve a web of related factors, both managerial and technical.”