MW High Court: Nema Farm Seeds Preservation Order Lifted

• The High Court of Malawi lifted a preservation order against Nema Farm Seeds, releasing over K383 million frozen by the Financial Intelligence Authority.
• Judge Violet Chipao ruled there were no grounds to suspect that funds used for seed supply were proceeds of crime.
• The court's decision sets a precedent for future cases involving asset freezing in Malawi law.
• Lawyers advising clients on transactions with Medf should be aware of this precedent and ensure thorough due diligence.

That the funds being the sum of K383,650,410.35 held in account domiciled at National Bank be released to the interested party immediately upon service of this order.

In a significant legal victory, the High Court of Malawi's Commercial Division has lifted a preservation order that had frozen over K383 million of Nessimu Nyama's money. The order was obtained by the Financial Intelligence Authority (FIA) against Nyama and his company, Nema Farm Seeds, in relation to a deal with the Malawi Enterprise Development Fund (Medf). The FIA had suspected that funds used for seed supply were proceeds of crime, but Judge Violet Chipao ruled there were no grounds to suspect this. The court's decision paves the way for the release of Nyama's K383.65 million held in a National Bank of Malawi account.

The preservation order was obtained under the Financial Intelligence Authority Act, which allows the FIA to freeze assets suspected of being linked to criminal activity. However, the court's decision highlights the importance of evidence in such cases. The judge noted that there were no grounds to suspect that the funds held in Nyama's account constituted proceeds or instrumentalities of crime. This ruling sets a precedent for future cases involving asset freezing in Malawi law.

The lifting of the preservation order has significant implications for businesses and individuals dealing with the Malawi Enterprise Development Fund (Medf). Lawyers advising clients on transactions with Medf should be aware of the precedent set by this case, where a preservation order was lifted due to lack of evidence linking funds to criminal activity. This decision underscores the importance of thorough due diligence in such cases. The court's ruling also highlights the need for the Financial Intelligence Authority (FIA) to ensure that its actions are based on solid evidence and not mere suspicion.

Lawyers advising clients on transactions with the Malawi Enterprise Development Fund should be aware of the precedent set by this case, where a preservation order was lifted due to lack of evidence linking funds to criminal activity.

Source: Original reporting via Nyasa Times