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State closes in on properties illegally obtained by Lungu’s family

Filed under: Breaking News |
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The State has instituted proceedings before the Economic and Financial Crimes Court to have tainted properties belonging to family members of former president Edgar Lungu, forfeited to the State.

Among the properties are the 15 flats belonging to Lungu’s wife Esther, Crest Lodge in Ibex Hill belonging to Charles Phiri and lawyer Chiyeso Lungu, a house, three flats and a poultry belonging to Chiyeso, land in Ibex Hill belonging to Charles Phiri and a farm in Sinda, Eastern Province, belonging to Chawama PF member of parliament Tasila Lungu.

The Director of Public Prosecutions (DPP) Gilbert Phiri has filed four originating notices of motion for an application of a non conviction-based forfeiture order of tainted property pursuant to Order 30 Rules 15 and 17 of the High Court Rules, read together with Sections 29 and 31 of the forfeiture of proceeds of crime Act no. 19 of 2010.

This implies that the Lungus will give up on their properties, without being subjected to trial.

According to an affidavit sworn on behalf of the DPP by Emmanuel Khondowe, a senior investigations officer at the Drug Enforcement Commission (DEC) under the anti-money laundering investigations unit, the DEC in May 2022 received information from a reliable source that politically exposed persons had illegally obtained property across Lusaka.

According to they information, there was real property that was reasonably suspected to be proceeds of crime at Plot no. 9334/1, 9334/2, 9334/3 and 9334/4 in State Lodge and belonged to Esther and her associates, which were acquired between 2013 and 2021.

He said upon receipt of the information, the Commission constituted a team of investigators who instituted investigations in the matter.

Investigations revealed that the 15 flats belonged to Esther Nyawa Tembo Lungu and the same was confirmed in the lands and deeds register.

He said he wrote to the Ministry of Infrastructure, Housing and Urban Development requesting for the the estimated cost of construction of the 15 blocks of double storey flats and it was revealed that the cost of the flats and other associated works on the properties, as at November 2022 was K41, 586, 110. 66.

Khondowe said he investigated Esther’s financial capacity, in relation to the properties acquired, and he interviewed Brian Mutakwa, a branch manager at ZANACO were Esther holds an account since March 27, 1995 as a sole signatory.

“The bank account had 65 debit entries worth K2, 511, 117.09 and 79 credit entries with a gross total of about K3, 104, 487.14 as credit and debit turnover between January 1, 2012 and August 16, 2022. Both credit and debit turnover consisted of inter account transfers of K500, 000. 00 on May 4, 2020, May 4, 2021, August 3, 202, May 10, 2022 and August 3, 2022, thereby increasing turnover on both ends with no fresh inflows,” he said.

The Esther Lungu Foundation had a kwacha and dollar account at First National Bank (FNB) and Esther was one of the signatories of the Kwacha account.

“The Kwacha account had total debit entries worth a gross total of K19, 459, 606. 86 and in this amount, there were placements of about K3, 000, 000 and US$20, 356.70 into fixed deposit accounts, which did not benefit Esther in her personal capacity,” Khondowe said.

In the dollar account, there was a credit balance of US$55, 115.57.

It was also established that Esther had no other income generating activities.

“I conducted an analysis of her known income and known expenditure for the period August 1, 2012 to August 16, 2022 which revealed an income of K3, 104, 487.14 against an expenditure of K2, 511, 117.09 with a variation of K593, 370.05. I did a comparison of the known income of K3, 104, 487.14 against the four properties with the 15 flats value at K24, 256, 434.55 which showed a variation of K21, 151, 947.41 above her known income,” Khondowe said.

He indicated that Investigations revealed that the three storey lodge in Ibex Hill, at Plot no. LUS/38478 in Lusaka, procured between 2013 and 2022, belonged to Charles Phiri, as confirmed by the lands and deeds register and the costs of construction obtained from the quantity surveyor at the Ministry of Infrastructure, Housing and Urban development was K15, 549, 422.22.

Ministry of Lands and Natural Resources official Andrea Chuni stated that the property at entry no.1 was a 99 year State lease to former ZAF commander Eric Mwaba Chinese, who obtained the title under certificate title no. 286342 on entry no.2 of the lands and deeds register.

Phiri had a kwacha and dollar account at FNB and there were debit entries worth K874,653.11 and credit entries worth K875, 155.54 as debit and credit turnover between July2, 2015 and January 3, 2023.

On the dollar account opened on October 20, 2016, at Kitwe industrial branch, there were debit entries worth US$2, 850.00 and credit entries worth US$2, 101.33 as credit and debit turn over between October 20, 2016 and January 20, 2023.

Khondowe said investigations at the Zambia Revenue Authority (ZRA), in relation to tax returns between Phiri and Crest Lodge, revealed that taxes on the three storey lodge built on the land has not been paid and tax evasion is a serious offence and attracts a penalty of three years imprisonment.

“Phiri sold 10, 892.3890 hectors of property no. F/Mpika/1912933 at US$100,000.00 to Muneer Mitha and Mitha Ibrahim Hanif Mohammed and paid K87, 250 property transfer tax,” Khondowe stated.

He said there was a huge difference between Phiri’s properties and his known income and he could not manage to build Crest lodge.

Khondowe said he invested Tasila and established that farm no. F/2278 in Sinda district had fish ponds constructed at K13, 950, 378.83.

He said he looked into Tasila’s financial capacity and according to her bank mandate at ABSA, there were debit entries worth K502, 833.67 and credit entries worth K502, 833.67 as credit and debit turnover.

According to Beston Kajoba, a director finance at Lusaka City Council, Tasila attended 35 meetings during the time she was a councillor between 2016 and 2021and was paid sitting allowances at a rate of K350 per sitting and transport refunds were paid at K60 within the radius of 25 Kilometers.

For the 35 meetings Tasila amassed allowances cumulative to K12, 550. 00 and K2, 100 for transport refund.

She was entitled to a monthly allowance of K3, 000 and the total allowances paid to her from 2016 to 2021 amounted to K154, 200

Tasila had one trip to Rwanda and was paid K16, 116.41 and from the summation of all her allowances and earnings between 2016 to 2021 was less that K184, 966.41.

During the 2021 general election, her asset declaration form indicated that she had assets worth K6, 130, 505.58 and an inspection at ZRA revealed that she had no other income generating activities.

According to an analysis of her known income and known expenditure between June 11, 2015 and August 31, 2021, she had an income of K867, 800.08 against an expenditure of K502, 833.67, with a variation of about K364,966.41

“A comparison of her income against the property valued at K8, 840, 098.00 showed a variation of about K7, 972, 297. 92 above her known income. There was a big gap between her known income and what she declared,” Khondowe said.

Chiyeso Lungu, who is a lawyer, has two farms in State Lodge, being property no. L/9390/M with a high-cost house and four chicken runs and property no. LN_79093/1, with three flats in State Lodge.

The same were acquired between 2013 and 2021.

Property no. L/9390/M at entry no.8 of the lands and deeds register is an assignment of property at a consideration of K3,000,000.00 and the assignor being Kalumbi Trevor with Chiyeso being the assignee.

Khondowe said according to a survey by the Ministry of Infrastructure, Housing and Urban Development, the cost of construction of the three flats was K2, 695, 895.28 and the one high cost house with four chicken runs was K6, 679, 544.34.

He said Chiyeso holds an account at FNB which she opened on December 9, 2014 and had no significant transactions since it was opened until 2018 when she started using it as a salary account.

“She became part of education outreach for children, a charity organisation which is no longer operational and opened an SME account on July 24, 2015,” Khondowe stated.

He said an inquiry at ZRA revealed that she never declared any tax income and her company, Crest Lodge, on property no. LUS /38478, off Twin Palm road in Ibex Hill, declared VAT amounting to K14, 306, 103.87 and also declared rental income amounting to K375, 000.

“The expenses were K8, 021, 370.14 and paid salaries of K3, 422, 675.63 resulting in expenses of K11, 444, 045.77 and the only disposable income the company made was K3, 237, 058.10,” Khondowe stated.

“Investigations at Patents and Companies Registration Agency (PACRA) revealed that she is a director and shareholder in Crest Lodge.
An analysis of her known income between January 2, 2015 and June 3, 2023 was K2, 143, 184.41 against an expenditure of K2, 138, 920.00 with a variation of K4, 264.13.”

He said a comparison of the known income and against the two properties, valued at K9, 375, 438.62, showed a variation of K7, 232, 254.49 above Chiyeso’s known income and she had no other income generating activities.

“I seized the real properties in question as they were reasonably suspected to be proceeds of crime. The properties are tainted and liable for forfeiture to the State because they are proceeds of crime. The offence in Section 71 of the Forfeiture of proceeds of crimes Act no. 10 of the Zambian laws is a serious offence,” said Khondowe.

By Mwaka Ndawa

– Kalemba

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