THE Economic and Financial Crimes Court has advised former KCM provisional liquidator Milingo Lungu to utilise the opportunity presented to him by the State and prove that he was entitled to the US$40 million he allegedly stole from the mining company.
It lectured Lungu to demonstrate that he legally earned the money and prevent the State from forfeiting it, unlike questioning its authority to determine whether he was lawfully paid by the official receiver of KCM for the services he rendered to the company during the liquidation process.
In this matter the National Prosecutions Authority (NPA) has requested the Economic and Financial Crimes Court to penalize Lungu by confiscating US$24,004,295.35 in his three bank accounts which is a remainder of the US$40 million he ‘embezzled’ from KCM.
Director of Public Prosecutions Gilbert Phiri applied for a non-conviction based forfeiture order in the Lusaka High court so that Lungu can surrender the money he illegally obtained.
Phiri wants the State to recover $7,004,007.43 held in account number 62694542731 at FNB, $7,000,287.92 held in account number 9130008809223 at Stanbic Bank and $10,000,000 held in account number 025-1095663 at ABSA Bank which Lungu allegedly stole from KCM (in liquidation) and transferred to his law firm’s accounts.
But in his arguments in support of affidavit in opposition Lungu claimed he was entitled to payment for the provision of his services as provisional liquidator.
He said the State has failed to prove its claim that the transfer of funds was illegal and amounted to theft.
Lungu stated that after relinquishing his position and rendering statements of account the official receiver of KCM has refused to pay him.
He added that the transfer and payment of monies between KCM and his law firm Lungu Simwanza and Company cannot amount to theft in so far as there is an outstanding debt.
Lungu raised preliminary issue on whether the EFCC set up has any practise and procedure to be followed under it for them to hear such a matter.
He sought a determination among others on whether the Court has jurisdiction to interpret the remuneration agreement.
KCM(in liquidation) being the second interested party in the matter said practice and procedure of the EFCC is adequately provided for under the High Court.
It said The Economic and Financial Crimes Court division being part of the High Court is regulated by the same rules provided by the High Court Act and other rules affecting the Court.
“There was no instruction given to Lungu Simwanza and company to have the money it received,” said KCM
“The court can interrogate all matters surrounding any issues including the remuneration agreement.”
Ruling on the matter, Judge Pixie Yangailo on behalf of Anne Ononuju and Mwanajiti Mabbolobbolo indicated that they cannot review Chief Justice Mumba Malila’s decision to administratively create a division of the High Court.
She said the EFCC has unlimited and original jurisdiction to hear and determine both civil and criminal matters under The Economic and Financial Crimes (Division of Court) Order.
“The practice and procedure to be employed in determining matters before this division of the High Court is the procedure prescribed for the High Court, which includes the determination of civil actions such as this application before Court,” Judge Yangailo said.
She ruled that under the prohibition and prevention of money laundering Act pursuant to which the notices of seizure were issued, non-conviction based forfeiture requires that law enforcement officers can seize property if there are reasonable grounds to believe the property is derived from money laundering.
“The question of validity for seizure notices which were issued in relation to criminal investigations, cannot be determined in this matter, as this matter is civil in nature,” judge Yangailo said.
She guided that nothing stops the Court from considering the remuneration agreement in determining the application before it.
Judge Yangailo stated that it is important for the Court to consider Lungu’s remuneration agreement, on which he is basing his argument on in order to ascertain whether or not the money he collected during the course of his duties as provisional liquidator of KCM is tainted and liable for forfeiture.
“Lungu’s contention that the interpretation of the remuneration agreement is the sole preserve of the Court hearing the winding up proceedings cannot be sustained and is accordingly dismissed,” Judge Yangailo said.
She directed that KCM is not a party to the proceedings and the State’s interest in the matter should not be tied to matters before the Constitutional Court and the Court of Appeal.
The court directed that though the Bank accounts which are subject of the application form part of the subject in other matters, the cases in the ConCourt and Court of Appeal should be distinguished from the forfeiture application.
Judge Yangailo said Lungu’s argument that the EFCC does not have power to determine the application because of the cases that are pending determination in other courts cannot be sustained.
“This Court as a division of the High Court, has jurisdiction to determine both civil and criminal matters and the practice and procedure to be employed in determining matters is the practice and procedure prescribed for the High Court, which includes the powers under The Economic and Financial Crimes (Division of Court)Order,” said judge Yangailo.
“We find no merit in the preliminary issues raised by Lungu. Consequently, it is dismissed.”
The Court further condemned Lungu to costs which will be taxed in default of agreement with the State.
By Mwaka Ndawa
Kalemba August 7, 2023.