Q & A WITH STEVE MIKALILE
24.04.2024
” My name is Matthew Hill and I’m a reporter with Bloomberg News. We’re running a story on the AG’s report on its audit into public debt, in which there are a number of allegations about Mikalile, including:
– Mikalile’s contracts were overpriced, and that items worth $79 million from Mikalile were either undelivered, not installed or of poor quality.
– It also said the authenticity of the equipment supplied was questionable and that the equipment did not meet the specifications given in the contract.
What I’d like to ask includes the following:
– Are the allegations about Mikalile in the AG report true?
– Did Mikalile do anything wrong, including sell the government overpriced equipment, some of which was undelivered, did not meet specifications or were of poor quality?
– If so, for what reason?
– Do you have any general comment on the findings of the AG report regarding Mikalile?
I’d much appreciate if you could provide responses as soon as possible.
Regards,
Matt (mhill58@bloomberg.net)”
ANSWERS (Mikalile)
” Thank you for reaching out. The following are the responses to your questions concerning the allegations about Mikalile Trading Ltd of Hong Kong in the Auditor General’s report:
1. *Truthfulness of Allegations*: The allegations reported are not accurate. We had a pre-inspection process, conducted by Ministry of Education officials, prior to delivery. All the items delivered to the 10,000 schools country wide were inspected and approved, thus countering the claims of undelivered, non-installed, or poor-quality items.
2. *Delivery and Specification Compliance*: All items were delivered in accordance with the contract specifications. This can be proven by the pre-inspection report in the possession of the ministry. The Ministry of General Education determined the allocation of goods to the various schools. We then did the distribution according to the Ministry of General Education’s delivery schedule. Documentation was meticulously kept, with three copies of delivery notes prepared for each transaction — for Mikalile Trading Ltd, the Ministry of General Education and the respective school — thereby ensuring full accountability and traceability.
3. *Concerns on Pricing and Interest Rates*: Regarding the allegations of overpricing and incorrect interest rates, it is essential to highlight that the audit was conducted without any consultation with Mikalile Trading Ltd. This oversight not only questions the audit’s impartiality but also fails to reflect the actual financial terms agreed upon. The contract specifies an interest rate of 5.35% annually, significantly lower than comparable market rates, such as those for euro bonds, with a payment plan structured over 10 years and a 3-year grace period.
4. *General Comment*: We advise journalists to engage in thorough follow-ups with the necessary ministries to obtain a complete and accurate picture. This approach will ensure that reporting reflects the full context and operations as they were contractually agreed and executed.