Shareholders in Malawi’s biggest bus company, National Bus Service Limited(NBS),have instituted investigations into allegations that Leston Mulli, the chairman of the company, drew K227.5 million irregularly.
The local billionaire withdrew the money in the last three years during which time the company failed to declare dividends to it’s shareholders.
Confidential documents, which I have seen, Mulli and Mulli Brothers Limited withdrew cash amounting to K49.5 million. He went on to draw K157 million through a cheque transaction and another K21 million meant for fuel.
In total, he irregularly withdrew a staggering K277.5 million, without any documentation but by merely using his position as chairman of the company.
Mulli has a 68.53 percent stake in NBS followed by transporter Abraham Simama with 19.7 percent and government with a stake of 11.77 percent.
But this influence has not deterred his fellow shareholders. They have taken him to task over the alleged impropriety of NBS’s cash revenues.
On May 29, 2012 they met to directly deal with the transactions involving the K277 million among other business transactions.
The meeting was attended by Mulli for Mulli Brothers Limited, Stewart Malata as government, Simama a businessman and company secretary Alick Msowoya as the secretary. They resolved that a complete reconciliation be undertaken.
“A complete reconciliation be done regarding the money drawn by Mulli Brothers and Mr Mulli from the company and the money that the company may have drawn from Mulli Brothers or Mulli himself,” the board meeting minutes read in part.
“This is to include any inter company transactions and transactions if any, between the company and Mr Mulli as well as fuel drawn by the company from Mulli Brothers Limited and fuel drawn by Mulli Brothers from the company for which they have been no payment or no replacement.”
Msowoya yesterday confirmed that a meeting was convened and that an investigation was agreed upon.
“I can confirm that an anonymous written allegations was made against Mr Mulli and following that a shareholders’ meeting was convened…to formally investigate both NBS and Mulli Brothers reconciling their company accounts,” Msowoya said.
He, however, declined to disclose any other details of the meeting.
Mulli, whose business activities dominate the country’s main economic sectors like agriculture, transport, health,and timber, this week admitted to drawing K277.5 million but laughed off suggestions of fraud.
“As a majority shareholder transactions between my other companies and NBS could not be said to be fraudulent,” he said.
“People should learn Corporate Governance that stipulates about
anybody holding majority shareholder and how they control the company…If I did inter-company transactions, that cannot be called fraud,” he said.
He employees an estimated 10,000 people working in 22 companies he owns, making him the largest single private sector employer in the country and about the richest
The shareholders also agreed that cheques be signed by both Mulli and Simama.
They also agreed that from now on, decision making does not rest on Mulli alone but to be done in consultation with Simama, who happens to the second biggest shareholder after Mulli.
The shareholders quizzed Mulli on other allegations of getting money from the bus company to buy spares and sells them back at higher prices.
He also faced questions on allegations that he has armed guards and cells were employees perceived to be in the wrong are beaten up and detained by guards.
Fellow shareholders also asked him about why Exclusive Garments, a company he owns, does uniforms and seat covers for NBS without a competitive bidding process.
Under Mulli’s chairmanship, the company has failed to hold any annual general meeting which has consequently led to non declaration of dividends.
They resolved that the chairmanship of the board of director be rotational provided that “all times a chairman shall be one of the shareholders.”
Simama yesterday confirmed that they had a shareholders meeting but also declined to disclose the details of what transpired.
But I did find out that the money is likely to go up to more than K277 million once an audit is completed.
Mulli has a presence in almost every major economic activity in the country –growing and exporting tea as Chitakale Tea Estate. He is one of the biggest suppliers of fertilizer trading as Mulli Brothers and phamarcueticals under Sunrise Phamarceuticals .
He is also one of the biggest transporters of both dry and wet cargo and for a while now, he has been involved in the Timber business as Flatland.