Malawi Savings Bank (MSB) Debt Collection Company chairperson, Chadwick Mphande confirmed in an interview that the company has failed to reclaim money from Mulli and other debtors.
As a result, he said the government company has launched legal action to force Mulli pay the debt.
Mulli brothers owes Malawians K4.9 billion borrowed from the defunct state owned MSB.
Despite owing Malawians alot of money, Mulli Brothers was compensated with k3 billion through the Attoney General, a move that has been widely condemned.
Patricia Kaliatia and Noel Masangwi, both former Mutharika allies and now his political rivals, claimed during United Transformation Movement (UTM) political rallies that payments were made to Mulli as a way of silencing the businessman after he launched a movement in the ruling DPP to oust Mutharika, 78, from power.
Mulli has strong links to President Peter Mutharika through their shared membership of Mulhakho wa Alhomwe heritage group.
Currently, Mulli Group is seeking K8 billion in interests on the amount paid, an action the Attorney General has said will challenge.
State advocate Neverson Chisiza told a local paper on August 26 that the State was challenging the fresh claim as government had already settled about K3.1 billion in claims over the same case—having last been heard in 2013.