The Malawi Law Society (MLS) has intensified scrutiny over the controversial purchase of the Amaryllis Hotel by the Public Service Pension Trust Fund (PSPTF), warning that the transaction raises serious governance concerns and possible corruption risks in the management of public pension funds.
The issue has come under heightened scrutiny following proceedings before the Public Accounts Committee, where the managing director of NICO Asset Managers, Daniel Dunga, told lawmakers that his firm could not support the acquisition of the hotel even when it was valued at K48 billion.
According to Dunga, the firm’s responsibility is to protect pension contributors whose savings are invested through the fund.
“We manage people’s money. When we talk about five trillion assets under management, it is not our money. It is the money that belongs to the people,” Dunga told the committee. “And it is their interest only that we protect jealously.”
Dunga also directed the committee to previous correspondence submitted by his firm regarding the proposed investment.
“If you look at our letter of 19th December 2023 and our January letter, which you have already seen, there’s only one person there that we are protecting and that is the contributors or members of the fund,” he added.
Despite the earlier valuation of about K48 billion, the pension fund later agreed to purchase the hotel at K128.7 billion, nearly three times the earlier valuation. The development has sparked national concern about whether the transaction represents value for money for thousands of Malawian public servants whose retirement contributions finance the fund.
From the perspective of the Malawi Law Society, the emerging details raise red flags about how the transaction progressed and whether appropriate due diligence procedures were followed.
A central issue in the inquiry is the role played by EMJ Advisory Public Accountants and its director, Emmanuel Chisale, whose firm produced the financial analysis that supported the much higher valuation of the hotel.
EMJ Advisory recommended that the value of the hotel could range between K115 billion and K145 billion. This recommendation later formed part of the basis for the pension fund’s decision to agree to purchase the property at K128.7 billion.
However, during the parliamentary hearing, Chisale admitted that his firm is not a registered valuer.
“We are not registered valuers. We were engaged by the Fund to do a business analysis,” he told the committee.
Public Accounts Committee chairperson Steven Baba Malondera openly questioned the firm’s capacity to justify the higher valuation.
“Are you a registered valuer? I am asking this because one of the valuers yesterday told us that at K48.7 billion it will take 36 years to recover the investment and you are saying that for the value in the range between K115 billion to K145 billion it will take about 18 years,” Malondera said.
Chisale explained that the firm’s involvement arose after receiving a request from the pension fund and reviewing the terms of reference.
“We got involved after getting an email and felt we were capable of doing the work after seeing the terms of reference that the Public Service Pension Trust Fund had put forward,” he said.
Consultant Simplex Bwanali, who conducted the financial analysis for EMJ Advisory, defended the firm’s work, saying the exercise focused on the financial viability of the hotel business rather than the physical property.
“We were engaged to do a business valuation and not a property valuation,” Bwanali told the committee.
Nevertheless, the Malawi Law Society maintains that the revelations raise serious questions about professional standards, due diligence and the integrity of decision making in transactions involving public pension funds.
For the legal body, the issue goes beyond the price of the hotel. It concerns whether proper procedures were followed and whether the retirement savings of thousands of public servants were adequately protected.
As the parliamentary inquiry continues, the case is increasingly being viewed as a major test of accountability and transparency in Malawi’s financial governance system, particularly in institutions entrusted with safeguarding public retirement funds.
The outcome of the inquiry is expected to determine whether further legal, regulatory or oversight action will be required.
