Maravi

NHA loses K3.5 billion plunder proceeds

NHA loses K3.5 billion plunder proceeds
By Chiwoyu Sinyangwe
Wed 25 Aug. 2010, 04:01 CAT

ABOUT K3.5 billion raised from the sale of properties seized by Task Force on Corruption has been swallowed by Ecobank after National Housing Authority (NHA) used it as collateral to obtain a K8.5 billion overdraft, highly placed sources have revealed.

But NHA chief executive officer Elias Mpondela has disputed the allegations, arguing that the money from the proceeds of the seized property was still intact and could be made available at the call of government.

NHA was appointed as custodians of the K3.5 billion and the money was to be used for among other activities, construction of some maternity wards in the country.

According to highly placed sources, NHA, the custodian of the K3.5 billion Task Force on Corruption money, used the money as security for K8.5 billion overdraft it got from Ecobank.

“Ever since Mr Mpondela came in a year ago, NHA has been borrowing from Ecobank using the K3.5 billion from Task Force on Corruption which is in its custody as security,” the sources explained.

“So, what happened was that when Ecobank realised that National Housing had borrowed way beyond the K3 billion plus which was the overdraft security, they called the security and that is how that money was swallowed.”

The sources said it was not clear how NHA spent the K8.5 billion it borrowed from Ecobank as most of projects it engages in are pre-financed by the final beneficiaries.

“You know Mr Mpondela has just been going to the bank getting overdrafts even when it is not very clear what these monies were used for because most of the operations of National Housing are always paid for upfront or down payment of 60 percent is paid,” the sources explained.

But in an interview, Mpondela said the K3.5 billion Task Force money was still intact and that it had not been swallowed by Ecobank. He, however, admitted that NHA had a K8.5 billion exposure to Ecobank which had been converted into a loan from an overdraft.

He said the total security which included the building housing NHA headquarters was by far higher than the collateral security used to get the overdraft.

“That money from Task Force is still there and if the government called for it, we would make it available immediately,” Mpondela said.

When asked to explain how the overdraft money was used, Mpondela - who jointly gave the interview with director of finance and operations Ernest Chanda - explained that the over draft from the bank was used for “operations” of NHA.

“We do get overdrafts for our operations to cover for things like paying contractors, salaries; basically operations for which we might need short-term financing,” he said.

Mpondela said NHA decided to convert the K8.5 billion overdraft of repayment period of one year into a loan with a repayment period of two years to cut down on repayment interest.

“What we basically told them Ecobank is that we can’t continue paying high interest rates on the overdraft when they were keeping our money and that was how we negotiated to convert the overdraft into a loan so that we could save the Zambian people money,” said Mpondela.

“There is nothing sinister and we are a public institution and we have nothing to hide.”

Mpondela said NHA was owed K9 billion from local buyers who had not fully settled their payments in full.

Labels: CORRUPTION, ECOBANK, ELIAS MPONDELA, NHA

posted by MrK @ 5:42 AM