Malawi
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Mapeto DWS suffers double blow in MRA tax evasion case

ACCUSED: Mapeto during previous court appearance

Mapeto David Whitehead and Sons (DWS) Limited found itself in deep waters as both the High Court and the Supreme Court delivered adverse rulings against the company’s directors. The courts dismissed their pleas, dealing a significant blow to their case.

On Thursday, High Court Judge Joseph Chigona rejected an application and all preliminary objections raised by the executives of Mapeto DWS and two Malawi Revenue Authority (MRA) customs officers in connection with the K16.5 billion tax evasion case. The application sought to have the matter referred to Chief Justice Rizine Mzikamanda for certification as a Constitutional issue.

One of the arguments made by the DWS executives was that they were facing charges under the Financial Crimes Act of 2017, which they believed was not applicable to their case. They claimed that the alleged offense took place in 2012, before the Act was introduced. On the other hand, the accused executives and MRA customs officers raised objections regarding the amendment of the charge sheet.

In his ruling, High Court Judge Joseph Chigona found that the application for certification and all the objections lacked merit and dismissed them entirely.

The setback for Mapeto DWS continued with a ruling by Justice Lovemore Chikopa in the Supreme Court on the previous day. Latif and Mapeto DWS had sought the release of their impounded goods, as the seizure had severely impacted their business, effectively causing its shutdown.

Justice Chikopa refused to grant the application, stating that it should have been brought as an appeal or in the context of one, rather than as a stand-alone application.

Faizal used to work closely with the DPP government

The tax evasion case against Mapeto DWS Limited and its senior executives began on May 23, 2021, when the Malawi Revenue Authority arrested five senior executives for alleged tax evasion amounting to an estimated K10.8 billion. The figure was later revised to K16.5 billion, and after factoring in penalties and interest, it surged to K32 billion two months later.

The five Mapeto DWS executives, Faizal Giffar Latif, Muhammed Gaffar, Abdul Rashid Bakali, Yaseen Muhammed, and Martin Mpata, all pleaded not guilty to the 15 counts related to customs offenses, VAT evasion, non-remittance of PAYE, and money laundering.

Assistant Accountant Devchad Purohit, also an accused in the case, was reported to be at large.

Additionally, two MRA officers, George Mwaluka and Tsepiso Kaunda, were implicated in the case and pleaded not guilty to charges of aiding and abetting smuggling and conspiracy to commit customs offenses.

Faizal Latif, who had significant political connections and acquired David Whitehead Limited in 2003 through a controversial privatization program, was known for funding the former ruling party, DPP, during political campaigns.

Mapeto DWS faced accusations of allegedly importing containers of brand-new tires but declaring them as used ones to the tax authorities. The MRA seized their goods in early 2021 on suspicions of smuggling.