Sky-high hotel sale plunges Peter Mutharika back into scandal
An overpriced deal has put pensioners’ savings at risk – and raised questions about governance under Malawi’s returning president.
Malawian President Peter Mutharika has been rocked by a major corruption scandal just months into his second term. His first presidency, from 2014 to 2020, was a period when corruption was rife.
In 2019, he was re-elected, but in February 2020, in a historic victory for democracy and the rule of law, the Supreme Court of Appeal annulled his 2019 victory over Lazarus Chakwera and ordered a rerun due to extensive vote rigging. Chakwera won the rerun.
Chakwera however did not effectively address Malawians’ economic hardships, and last year Mutharika and his Democratic Progressive Party (DPP) defeated Chakwera and his Malawi Congress Party (MCP) in elections, winning almost 57% of the vote. He returned to power pledging to clean up the Malawian state.
But a scandal surrounding the Public Service Pension Trust Fund’s (PSPTF) K128.75 billion (about R1.21 billion) November 2025 purchase of Blantyre’s Amaryllis Hotel is casting doubts on that promise. Parliament and government agencies are probing the deal after independent assessors valued the property at only about K47 billion.
A Malawi source who requested anonymity told ISS Today that Parliament had taken up the case because Mutharika had reneged on a campaign-trail promise to appoint a judicial commission of inquiry into the hotel deal.
A K128.75 billion hotel purchase – nearly three times its value – has put pensioners’ savings at risk
The deal has especially outraged Malawians because it appears that about K80 billion of pensioner savings – in a poor country – has evaporated. Malawian media say former PSPTF board chair James Kumwenda told Parliament’s Public Accounts Committee (PAC) last month that the board resolved – at a January 2024 extraordinary board meeting – not to buy the hotel.
The board had acted on an independent valuator’s warning that the hotel was overpriced. But the purchase went ahead regardless.
Parliament adopted the 294-page PAC report on 31 March 2026, but it wasn’t made public. The Platform for Investigative Journalism (PIJ) said a leaked report showed the PAC’s ‘verdict is devastating.’
‘It does not merely describe a bad investment. It describes an institutional collapse’ and a ‘serious breach of fiduciary duty.’
The PAC recommended criminal investigations or suspensions of several senior current or former officials involved in the deal, including a probe of Attorney-General Frank Mbeta for apparent failure of oversight.
It recommended investigations into several Office of the President and Cabinet officials and the immediate suspension of Anti-Corruption Bureau (ACB) Acting Director-General Gabriel Chembezi. He was found to have actively lobbied for the deal as a private lawyer, in what appeared to be a flagrant conflict of interest.
The scandal straddles two administrations, fuelling accusations and counter-accusations between the rival parties
An offer to buy the hotel from Yusuf Investments Limited (YIL) for K47 billion was first floated in early 2023. In January 2024, the PSPTF board formally resolved to abandon the purchase, but then reported allegations of pressure from the Office of the President and Cabinet to clinch the deal emerged, said the PIJ.
On 16 September 2025 Mutharika defeated Chakwera in elections and was sworn into office on 4 October. On 25 October a newly appointed PSPTF board authorised the purchase of the Amaryllis Hotel for a ‘staggering K128.7 billion – nearly three times the price discussed earlier,’ the PIJ said.
But a company called EMJ Advisory supported the high valuation.
On 14 November the Reserve Bank of Malawi (RBM) ordered an immediate halt to the transaction. But on 17 November ‘in an act of open defiance,’ the PSPTF signed the purchase contract anyway, said the PIJ. As details of the deal began to circulate on social media and public outrage grew in 2026, the authorities were forced to take stronger action.
In February new RBM Governor George Partridge ordered the immediate reversal of the deal. But the PSPTF had already paid YIL K90.125 billion in part payment, said the ACB, which reopened its inquiry into the deal on 16 March.
To prevent further transactions while its investigation was underway, the ACB said it had issued a restriction notice on the K38.5 billion already frozen by the Financial Intelligence Authority from YIL’s accounts, and another K38 billion – the outstanding balance of the hotel’s purchase price. (The difference between the K90.125 already paid to YIL and the K128.7 billion purchase price.)
Mutharika has pledged to back the investigations, but withholding the PAC report is not a good start
The ACB said it was also investigating K5.497 billion withdrawn in cash amounts from YIL’s account at the National Bank of Malawi between 27 January and 6 March 2026. It said these large withdrawals of cash had ‘raised suspicions of money laundering and corruption which the ACB is actively probing.’
One Malawian source told ISS Today anonymously that some suspected the money was withdrawn to bribe witnesses not to testify against implicated people. A media report said a senior DPP official was captured on CCTV withdrawing the money.
As with previous Malawian corruption scandals, this saga is extremely tangled. Part of the complexity stems from the fact that the scandal spans two administrations: Chakwera’s MCP and Mutharika’s current DPP. This has led to a flurry of accusations and counter-accusations between the two parties.
The process of buying the hotel began under the Chakwera administration but was finalised when the deal was signed on 17 November, after Mutharika took office on 4 October.
A senior Malawian official who requested anonymity said Chakwera himself decided to pull out of the deal just before leaving office because of the reservations and warnings about it.
Whether this sudden flurry of investigations leads to actual prosecutions, and how high up the hierarchy that goes, are questions on many ordinary Malawians’ minds – especially public servants anxious about their pension savings.
Mutharika has pledged to fully support the investigations, but time will test the sincerity of that promise. The fact that the PAC report has not been published is not encouraging.
For permission to re-publish ISS Today articles, please email us. In South Africa, News24 has exclusive rights to republish ISS Today articles. In Nigeria, Premium Times has exclusive rights to republish ISS Today articles.
