By Collins Mtika
On February 3, 2026, a seven-member panel of Malawi’s Supreme Court of Appeal delivered a unanimous ruling that would set the stage for what may become the most expensive court-ordered liability in the country’s fiscal history.
Led by Chief Justice Rizine Mzikamanda, the panel found that the Reserve Bank of Malawi and the Minister of Finance had acted unlawfully in May 2005 when they revoked the banking licence of Finance Bank of Malawi Limited without affording the institution a fair hearing. The closure, the court held, was disproportionate.
Regulatory alternatives, including fines, corrective directives, and supervised restructuring, had been available and were not pursued.
Finance Bank has been in voluntary liquidation since that closure. It is now seeking damages of K1.02 trillion and above, a figure submitted by the bank’s own financial experts and representing approximately nine per cent of Malawi’s approved national budget for 2026/27, which parliament set at K10.978 trillion.
That claim is not yet a judgment. The damages remain subject to a formal assessment by the Assistant Registrar of the Supreme Court of Appeal. On May 26, 2026, that process was adjourned until June 15, with government-appointed financial experts requesting additional time to prepare a counter-analysis.
Attorney General Frank Mbeta, speaking after the adjournment, confirmed the state’s intention to contest the figures.
“We will look at what they are looking for so that we can seriously challenge those figures,” Mbeta said. “We don’t believe that it is payable that way. It is way too much.”
The Malawi judiciary moved swiftly to temper public expectations. In a press statement dated February 13, 2026, Chief Registrar Innocent Nebi described figures then circulating in public discourse as “speculative and premature”, confirming that no monetary award had been determined by the court.
What the ruling has nonetheless established is legally and fiscally consequential: a binding appellate finding that Malawi’s central bank breached the principles of administrative justice when it shuttered a private financial institution.
A damages award approximating the amount claimed would individually exceed what the 2026/27 budget allocates to agriculture, health, education, or road infrastructure.
The Damages Calculation
The damages submission was prepared by Mkuzo Kenneth Kuwana of Kita and Company, described in court filings as a group financial adviser to the Mahtani Group of Companies. Finance Bank of Malawi was controlled by the Mahtani Group, a regional conglomerate owned by Zambian businessman Rajan Mahtani.
According to court filings reviewed by this publication, Finance Bank reported profit after tax of K152 million in 2004, the year preceding its closure.
The damages model takes that figure, calculates its ratio relative to the then-profits of National Bank of Malawi, extrapolates that proportion forward across two decades, and applies it to National Bank’s present market value.
On that basis, the filing projects that Finance Bank’s market capitalisation might have reached approximately $352 million by December 31, 2025, had the institution continued operating without interruption.
Local damages are calculated at $451.9 million. Finance Bank is additionally claiming $100 million for alleged lost international banking and trade opportunities, together with K61.7 billion in supplementary claims covering alleged unpaid remuneration, funds applied to offset liabilities, and employment contract disputes.
The submission further requests that all sums accrue interest at prevailing commercial lending rates from 2005 to 2026, a calculation that would substantially inflate the total beyond the K1.02 trillion headline figure.
The analytical foundation of the entire projection rests on a single core assumption: that Finance Bank would have remained consistently profitable and growing across 21 consecutive years, through the global financial crisis of 2008, the economic disruptions of the COVID-19 pandemic, and successive climate and macroeconomic shocks specific to Malawi.
That assumption has not been subjected to independent audit. It derives from a model prepared by a financial adviser employed by the claimant’s own beneficial owner.
The government’s counter-analysis remains undisclosed. The Attorney General has not publicly indicated what figures the state considers defensible, what alternative methodology it proposes, or whether a negotiated resolution has been considered.
A Successor Institution’s Failure
Following the licence revocation, Finance Bank’s shareholders chose to place the institution into voluntary liquidation. That decision was theirs, not one compelled by the regulator. In 2013, the Reserve Bank of Malawi granted a fresh banking licence to New Finance Bank (Malawi) Limited, with Rajan Mahtani listed as a principal shareholder.
The same ownership group was thus afforded a renewed opportunity to operate in the domestic banking sector.
By 2017, MyBucks S.A., a Frankfurt-listed fintech company, had acquired a 50 percent stake in New Finance Bank at a combined asset base of approximately EUR 22.1 million. New Finance Bank ultimately failed under that management.
Nedbank subsequently acquired full control of the institution before it was rebranded as Centenary Bank.
The trajectory of this successor entity is a matter of documented public record. An institution operating under substantially the same principal ownership, licensed within a decade of the original closure, did not achieve sustained commercial viability.
Finance Bank’s damages claim rests on an assumption of continuous growth across two decades. That assumption sits in some tension with the actual experience of the successor operation under comparable governance.
Beneficial Ownership and Regional Regulatory Record
Court and regulatory records show that in 2011, the Bank of Zambia suspended shareholder rights held by Mahtani in Finance Bank Zambia, following an inquiry that found he controlled more than 56 percent of that institution through intermediary corporate structures, exceeding statutory ownership limits.
No equivalent finding has been made in relation to Finance Bank Malawi, and no Malawian court has ruled on that question. The Bank of Zambia finding nonetheless forms part of the documented public record concerning the beneficial owner of the entity now seeking close to K1.02 trillion from the Malawian state.
A Question of Counsel
Finance Bank is represented in the compensation proceedings by Wapona Kita of Kita and Company. Court filings confirm that Kita and Company also employs Kuwana, the financial expert who prepared the damages calculation submitted on behalf of Finance Bank.
The same firm therefore provides both the legal representation and the financial analysis underpinning the claim.
Separately, an internal report submitted to the Chief Justice on April 30, 2024, prepared by investigators commissioned by the Malawi Law Society, examined alleged irregularities at the commercial division of the High Court in Lilongwe.
According to that report, investigators identified what they characterised as a pattern in which certain cases handled at the division had outcomes that were “usually a foregone conclusion in favour of those members’ clients.”
The report named four legal practitioners as having frequently appeared in the cases examined: Emmanuel Theu, Gift Nankhuni, Edgar Kachere, and Kita. Justice Kenan Manda and assistant registrar Anthony Kapaswiche were identified in the report as alleged organisers of the arrangement.
The Law Society report does not constitute a judicial finding of misconduct. No formal disciplinary action against any of the named practitioners or the named judge has been publicly confirmed. Parliament announced a separate inquiry into the conduct of Justice Manda, and no findings had been published at the time of reporting. Kita has acknowledged the existence of the inquiry.
The Finance Bank compensation proceedings have not been formally connected, by any ruling or finding, to the conduct described in the Law Society report. Kita and Company did not respond to a request for comment on this article.
The Fiscal Dimension
The potential scale of the liability warrants examination against Malawi’s current fiscal position. The 2026/27 national budget allocates K971.3 billion to agriculture, K558.07 billion to health, K316.6 billion to education, and K447.1 billion to road infrastructure.
A single compensation payment approaching K1.02 trillion, before the addition of accumulated interest, would individually exceed each of those sectoral appropriations.
Malawi’s fiscal headroom is constrained. Public debt stood at K23.9 trillion, approximately 90.9 percent of GDP, as of December 2025. The 2026/27 budget is structured around reducing the fiscal deficit from 11.9 percent of GDP to 9.0 percent.
A court-imposed liability of the magnitude Finance Bank is seeking would materially complicate both objectives. The budget projects economic growth of 3.8 percent in 2026, rising to 4.9 percent in 2027. A compensation payment of the scale sought would complicate those projections accordingly.
Malawi’s four-year Extended Credit Facility with the International Monetary Fund lapsed in May 2025, after the country failed to complete a single programme review within the required period. Any future engagement with the Fund will require demonstrable fiscal consolidation.
A large, unbudgeted contingent liability of this nature may create disclosure obligations and affect the government’s credibility in future borrowing negotiations with multilateral creditors.
State Response and Outstanding Questions
The Ministry of Finance has not issued a public statement on the matter. The Reserve Bank of Malawi has indicated it will await the registrar’s assessment before commenting. The Law Society report on the commercial court division has not been released in full.
Parliament’s announced investigation into Justice Manda had produced no public findings at the time of reporting.
The damages assessment continues. The next scheduled hearing is June 15, 2026. The government’s financial counter-analysis remains undisclosed.
The methodology underpinning the K1.02 trillion figure, its durability under expert scrutiny, and the registrar’s ultimate determination of a defensible quantum will shape what comes next.
