As the Public Accounts Committee of parliament has resumed it's inquiry into the purchase of Amaryllis hotel by the Public Service Pension Trust Fund ( PSPTF) Former registrar of financial institutions Dr Mafuta Mwale says the controversial Amaryllis Hotel transaction went ahead despite strong objections and warnings from the financial regulator.

Appearing before the Public Accounts Committee of parliament on Wednesday Mwale said his office was completely disregarded in a move he describes as unprecedented in Malawi’s financial governance history.

Dr. Mwale told the committee that his office had raised red flags over the structure of the investment, warning that it risked locking pension funds into illiquid assets such as hotels and properties, which could compromise the fund’s ability to pay pensioners on time.

Mwale said the core concern from the regulator was the need to protect pension funds from being overexposed to investments that cannot quickly be converted into cash. 

"While assets like hotels may appear valuable on paper, they can create liquidity challenges, potentially leaving pensioners unpaid if funds are tied up and cannot be accessed in time" he said.

He further stated that the regulator’s mandate includes enforcing compliance through measures such as freezing accounts, revoking licenses, or imposing penalties, but said these actions were not taken because the full information requested from the fund was not provided.

"The situation exposed weaknesses in adherence to regulatory guidance during the transaction because they went ahead with the deal even after my office ordered that they halt," he said.

On governance, Mwale suggested that reforms may be necessary, including strengthening oversight structures or involving private sector expertise to improve investment decisions and compliance within pension fund management. 

Meanwhile, PAC Chairperson Steve Malondera praised Mwale for appearing before the committee despite his health condition, saying his cooperation and recommendations were valuable to the ongoing inquiry. 

He also confirmed that the committee rejected a request by Amaryllis Hotel owner Shiraz Yusuf of Yusuf investment to hold proceedings in camera, insisting that the public must follow the process given its national importance. 

Malondera further indicated that Yusuf, in subsequent communication, informed the committee that he is unable to appear due to health-related challenges. As a result, the committee has rescheduled his appearance to 29 April to allow him time to recover and participate fully in the inquiry.

"If Yusuf fails to appear on the rescheduled date, the committee will proceed by summoning board members of Yusuf Investments."

Malondera further said legal instruments are being activated to compel the appearance of former secretary to the president and cabinet Colleen Zamba as the committee moves to conclude its investigation and compile its final report.