Local business conglomerate MBL Holdings owned by Mulli Brothers has admitted it is currently sailing in troubled financial waters, alleging that the current government is squeezing it left, right and centre.
However, government spokesperson, Information Minister Moses Kunkuyu, has vehemently denied the allegations the company has made.
The conglomerate, which during the administration of the late Bingu wa Mutharika was one of the companies which was investing massively in many sectors and used to win most lucrative government tenders, is wobbling into financial trouble, barely eight months after the death of Mutharika marked the end of his administration and the exit of his Democratic Progressive Party (DPP) from power.
MBL Holdings Managing Director Leston Mulli admitted that his company is facing financial challenges on Saturday during the 6th anniversary memorial ceremony of his late father Lacton Mulli, the founder of Mulli Brothers group.
Speaking at Nyezerera Village in Phalombe, Mulli claimed government is currently refraining from doing business with the company.
According to the business magnate, the move taken by the government to squeeze MBL Holdings will not affect him as an individual but the country as a whole.
“We are in problems financially and there are several hands playing a role to bring MBL Holdings down, the government inclusive. A lot of people are suffering; the company is currently retrenching staff while others have gone for three to four months without pay. Our suppliers are also being affected.
“It is a challenge to us and we pray to God to be on our side and win this battle for us. We will fight on and we are positive that we will breakthrough,” Mulli said.
He said as a company they have been supportive to several government officials and it is surprising that the very same people are busy trying to bring the company down.
Mulli described the year 2012 as the worst in business terms, but they have striven to remain in business.
“We are not worried with whatever happened. We are business people and we will remain in business. Whatever happens, our brains are not dead and we will come up with new ideas of surviving on the market.
“People thought we will collapse the moment there was a regime change but we are still fighting and will continue doing that. So far we have not lost any subsidiary and we will maintain that,” he said.
Among some of Mulli’s challenges, two weeks ago about 400 workers at Chitakale Plantantions and Steco in Mulanje quit their jobs through the district labour office after going four months without pay.
Government owned Malawi Savings Bank recently dragged Mulli Brothers to court over non-settlement of a K3.2 billion overdraft which the company took, but which was later turned into a loan.
The bank is demanding K3.3 billion for failure by the company to service the loan. The company through its lawyer is challenging the claims.
A report released by PriceWaterHouse Coopers in October also indicates that MBL Holdings misappropriated funds at National Bus Company (NBC) in which Mulli is a majority shareholder under the government Public, Private Partnership (PPP) initiative.
The report has recommended that MBL Holdings should pay back K267.2 million to the bus company as Mulli is suspected to have used the money in intercompany transactions.
MBL Holdings also had to payout K18 million to Friends of Mulanje Orphanage (Fomo) owner Mary Woodworth to avoid closure of its subsidiary, Chitakale Plantantions in Mulanje.
In July, the court in Mzuzu granted an injunction to government stopping Flatland Timbers owned by Mulli Brothers from plying its timber trade in Viphya Forest Reserves.
Government’s response
While Mulli claims his business fortunes are crumbling due to state underhand activities, Kunkuyu says that there is no deliberate policy to squeeze Mulli Brothers, let alone see it collapse.
Kunkuyu said every Malawian has the freedom to do business in the country.
“On tenders, there are procurement procedures which businesses and companies should follow to qualify. Mulli Brothers should just be doing that.
“Mulli Brothers is one of the big local companies that employs a lot of Malawians and as government, we have not put in place any policies in whatever form to pull down the company,” he said.
He said the government would like to see the private sector grow and hence appreciates the role MBL Holdings plays.
“I reiterate that government would not want to see Mulli Brothers out of business,” he stressed.
Kunkuyu, however, hinted that there is a possibility that previously some companies were flouting procedures in getting government contracts, which is not the case this time.
Mulli Brothers, which have stakes in transport, telecommunications, agriculture, tourism, pharmaceuticals and many others during Mutharika regime, used to dominate in winning many multi-million government tenders and contracts including that of procuring and transporting subsidised fertilizer.
