By Twink Jones Gadama
Malawi’s Attorney General, Thabo Chakaka Nyirenda, has taken a bold step in demanding $15 million (approximately K26 trillion) from Turkish firm, Star Agritech International, over an unpaid tobacco deal dating back to 2013.
The deal in question involves Malawi Leaf Company Limited (MLCF), a state-owned enterprise established in 2006 to stabilize the country’s tobacco industry, which was dominated by multinational companies at the time.
MLCF had entered into a contract with Star Tobacco International, now known as Star Agritech International, to sell over three million kilograms of tobacco.
In a demand letter dated November 1, 2024, addressed to the company’s managing director, Ambassador Ahmet Semseddin Arda, Chakaka Nyirenda gave the Turkish firm 21 days to provide full compensation.
Failure to comply will result in civil proceedings and criminal prosecution against the company’s directors.
Chakaka Nyirenda emphasized the gravity of the situation, stating, “If they do not pay, we will bring a civil claim for damages against the company, in addition to criminal proceedings against its directors.”
This move by the Attorney General’s office demonstrates the government’s commitment to protecting the interests of Malawian companies and ensuring that international business deals are conducted fairly and transparently.
The tobacco industry is a significant contributor to Malawi’s economy, and this case highlights the importance of enforcing contracts and ensuring that payments are made promptly.
As the 21-day ultimatum ticks away, all eyes are on Star Agritech International to see if they will comply with the demand.
If not, the case may set a precedent for future international business dealings in Malawi.
In October 2013, Malawi Leaf Company Limited (MLCF) and Star Tobacco International entered into a contract for the sale of over three million kilograms of tobacco.
The deal was part of efforts to stabilize the country’s tobacco industry, which was dominated by multinational companies at the time.
The Attorney General’s office has demanded $15 million (approximately K26 trillion) from Star Agritech International, citing the company’s failure to honor payment obligations.
Failure to comply with the demand will result in civil proceedings and criminal prosecution against the company’s directors.
The outcome of this case may have significant implications for Malawi’s economy, particularly the tobacco industry.
A favorable resolution could boost investor confidence and demonstrate the government’s commitment to enforcing contracts.
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