Govt applies for forfeiture of $40 million belonging to Lungu, ex-provisional liquidator for KCM

The Director of Public Prosecutions (DPP) has argued that the transfer of over US$30 million into Lungu Simwanza and Company accounts by former Provisional Liquidator, Milingo Lungu, was a calculated scheme to steal, defraud and launder monies belonging to Konkola Copper Mines (KCM).

This is in a matter where the DPP, Gilbert Phiri, applied before the Economic Financial Crimes Court, for the state to seize $40 million dollars deposited in three accounts, belonging to Lungu.

Read more: Ex-President Lungu’s daughter, Chiyeso, tells court how she acquired seized K3 million property

The DPP said Lungu took advantage of his position as KCM liquidator and stole $40 million dollars belonging to KCM.

Lungu in his affidavit in opposition to the DPP’s application denied any illegality stating that he was entitled to the accrued commission.

The DPP has, however, argued that the interested party was only entitled to an advance monthly remuneration of US$52,000.

“Any other claims of commission were to accrue to him only at the conclusion of the liquidation process or his seizure of being provisional liquidator minus the monthly advance payments. The interested party’s entitlement as Provisional Liquidator was governed by the Remuneration Agreements exhibited,” DPP contended.

The applicant further submitted, “the first interested party was only due to claim commission at the point of his resignation in March, 2022. And according to the settlement by the first interested party, he was obligated to render an account and statutory reports that were to include liquidation fees,” .

The DPP submitted Lungu’s remuneration was not a perennial debt, stating that anything drawn outside the scope of the agreed advance salary in the remuneration agreement was illegal and against the law as provided in the Corporate Insolvency Act.

“We insist that the narration of the payment as legal fees was a ploy to unjustly enrich and deprive KCM of the money and wasn’t yet due to the first interested party and in abuse of the fiduciary duties he owed due to the position he held,” argued the DPP.

Phiri prayed to court to order for the forfeiture of the money to the State as there was reasonable proof that it was tainted.

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