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IGG silences Minister Amongi over 15 allegations against former NSSF boss Byarugaba, confirms she wanted Shs6b to swindle

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The former National Social Security Fund (NSSF) boss Richard Byarugaba who steered the Fund to greater heights is clean a man after the Inspector General of Government (IGG) found no evidence to prove 15 allegations labelled against him by the Gender Minister Betty Amongi who never wanted him at the helm of the Fund and wanted him prosecuted unfairly.

It should be remembered that early this year Minister Amongi carried a smear campaign against Byarugaba who many knew had managed the Fund well to the extent that contributors were getting a good interest on their money, but also that under Byarugaba, NSSF had invested in profitable ventures in power (UMEME), real estate (construction of office space and residential houses) among others.

Eagle Online brings you IGG’s report trashing all Minister Amongi’s 15 allegations against Byarugaba in an attempt to tarnish his name in the eyes of the public and the country’s Appointing Authority who is President Yoweri Museveni.

The report which is due to be released this morning by the ombudsman will leave Minister Amongi with the burden of proving as to why she brought all the allegations without evidence on Byarugaba.

Allegation One -False

To begin with, Amongi alleged that Byarugaba made an exaggerated budget of Shs400 billion for purchase of land at Nakigalala. She went ahead to allege Byarugaba indicated that this purchase was approved by President Yoweri Museveni, Finance Minister Matia Kasaija, and the NSSF Board, which was not the case. Further, she alleged Byarugaba indicated there were ownership disputes over this land.

After a thorough investigations the IGG found Amongi’s first allegation false reasoning thatthe NSSF budgets for the Financial Years 2019/20 to 2021/222 all indicated that NSSF planned to spend Shs250 billion for strategic land purchase, under investment capital expenditureThe NSSF budget for FY 2022/2023 indicated that the Fund planned to spend Shs 400 billion for strategic land purchases. This included land at Nakigalala which was estimated at Shs250b and another piece of land located at Naguru belonging to the Uganda Police Force, estimated at Shs150 billion. It was not true that the former MD (Byarugaba) inflated the cost of the land at Nakigalala.

“The Nakigalala land was not free from encumbrances and there was an ongoing civil suit before the High Court (Land Division) contesting the ownership of the land by Madhvani Group. The family of the Late Prince Yusuf Ssuuna Kiwewa was also claiming ownership of the same land. If NSSF purchases the land in this current state, it is likely to be exposed to endless disputes and costly litigation.”

Allegation Two- False

Minister Amongi alleged to the IGG that NSSF performance under the leadership of Byarugaba, had been declining over the past four years and there was a declining trend from 32% in 2010 to 11% in June 2022 which was exhibited among others by stagnation of membership of savers over the last five years.

However, the IGG found the above false, stating that on the contrary,NSSF registered an increase of 14,000 new members between 2019 and 2022. The Fund had a total of 1,517,471members as at July 2022. 701,000 of these were active (making regular contributions). The total annual contributions made by members increased from Shs688,095,082,000 in 2015 to Shs1,486,439,181,376 in 2022. The accumulated contributions steadily increased from Shs1,659,793,727,000 during FY 2009/2010 to Shs16,961,837,142,000 during FY 2021/2022.

The IGG further noted that for the period 2012 to 2021, NSSF consistently offered an interest to members of at least 10%, with the highest interest of 15% in 2018. In 2022, the Fund declared an interest of 9.65%, partly as a result of Shs626,098,945,132 it paid out as mid-term access benefits to members following amendment of the NSSF Act in January 2022.

In conclusion, the IGG dealt Amongi a blow stating: “It was not true that the Fund’s performance had been declining. To the contrary, the performance was good and better than most service sector institutions like commercial banks and insurance companies that registered slow growth and high cost income ratios of above 50% between 2017 and 2022. It also performed better than NSSF Kenya. However, the Fund needs to improve in registering new members.”

Allegation Three-false

Amongi in her desperate move to remove Byarugaba from NSSF went ahead to claim that the former NSSF MD took bribes and commission through waiving of NSSF contributions of workers of the Uganda Railways, Uganda Broadcasting Corporation and arbitrarily reduced penalties that were to be paid by Tororo Cement

The IGG found the above allegation as untrue explaining thatin 2008, NSSF filed a suit in the High Court seeking recovery of unremitted contributions, statutory interest and penalties from Uganda Railways Corporation (URC) for the period 1995 to 2001. During the course of the hearing, the then Ministers of Works and Finance intervened in the dispute and the parties entered into a partial consent which was endorsed by Court on February 7, 2013. Under the consent, URC acknowledged the under remittance and undertook to pay Shs4,893,359,606, being due contributions, interest thereon and a discounted penalty. Initially, the total penalty that URC owed NSSF was Shs25,161,283,831. However, the MD waived 94% of the penalty following an appeal from the Minister for Finance Planning and Economic Development. Shs1,000,000,000 was still outstanding.

In 2016, NSSF conducted a compliance Audit on Tororo Cement Limited which revealed that the firm had NSSF contribution arrears of Shs1,279,954,284 and a penalty of Shs3,460,227,863. NSSF and Tororo Cement Limited entered into a settlement deed where it was agreed that the firm would pay Shs1,279,954,284 to NSSF in four installments and the penalty would be considered for waiver by the MD upon settlement of the payment plan. The firm paid the money as indicated in the deed.

In 2018, NSSF filed a criminal case in the Chief Magistrates Court of Nakawa against Uganda Broadcasting Corporation for recovery of NSSF contribution arrears, interest thereon and penalty that had accumulated as a result of noncompliance. On September 22, 2021, a consent judgment was entered between UBC and NSSF to pay the outstanding amounts in installments. UBC was supposed to pay Shs4,942,741,170 being unremitted monthly standard contributions for the period of November 2005 to September 2016 and Shs3,749,377,185 as the annual statutory interest accrued on the contributions as at July 2019. It was also agreed that the Fund would waive the accrued penalty of Shs29,150,077,970. As at January 2023, UBC was still indebted to NSSF to the tune of Shs11,691,728,081

Concluding on the third allegation, the IGG silenced Amongi saying: “There was no evidence obtained to support the allegation that Mr. Byarugaba waived NSSF contributions of workers of the Uganda Railways Corporation and Uganda Broadcasting Corporation and arbitrarily reduced the penalty that was levied on Tororo Cement Limited.”

Allegation Four -False

Amongi alleged Byarugaba refused to implement her and the Board’s proposals in respect of the NSSF budget for the FY 2022/2023 where she wanted Shs6 billion allegedly to carry out mass sensitisation for recruitment of more NSSF members.

The IGG indeed established that the minister needed the Shs6 billion to swindle it as it was not her responsibility as an individual to do that job.

The NSSF Board approved a proposed total budget of Shs2,267,700,000,000 for the FY 2022/2023 on May 13, 2022 and it was submitted to the Minister for consideration and approval.

On June 16, 2022, the Minister of Gender Labour and Social Development informed the Chairman that she had approved the budget subject to amendments. The amendments were deferring Shs400,000,000,000 and Shs115,000,000,000 meant for strategic land purchases and the Yusuf Lule road project respectively. She also directed that Shs6,000,000,000 be provided from the operations budget for strengthening compliance and enhancing partnerships and collaboration through stakeholder engagements. However, the former MD declined to amend the budget to provide for Shs6,000,000,000 as those activities had already been provided for in the original budget.

Allegation Five-False

Minister Amongi also alleged that previous recommendations by the IGG in respect of the sale of land at Bakuli were not implemented by Byarugaba but the IGG found this allegation wanting.

The allegations relating to the irregular disposal of land at Bakuli were investigated under reference HQT/06/05/2013 and a report issued in April 2014. It was established that the land at Plot 434 Namirembe was purchased by NSSF at Shs650,000,000 in 2008 and disposed of at the same price in 2012. All the I.G recommendations made in this matter were implemented save for these two. 

Allegation Six- False

Amongi in trying to look bad in the eyes of the public, still would allege that Byarugaba and his cohorts like the head of Investments used the budget as a means of siphoning money out of NSSF through exorbitant expenditure on foreign trips but this allegation was found to be false.

Among others, the IGG established that Richard Byarugaba was invited by the Africa Investor as a distinguished speaker at the Sovereign Wealth and Pension Fund Leaders’ Summit held in New York on 24th and 25th September 2018. A total of $15,363 was advanced to him and the Chief Investment Officer as per diem, air tickets and visa fees for this trip. The hosts of the summit did not facilitate the trip and the cost was borne by the Fund.

Allegation Seven- False

Amongi alleged that Byarugaba rejected initiatives to scale up registration of new members in Industrial Parks (especially Kapeeka) but the IGG said the minister had no evidence.

“NSSF registered a total of 137 companies in the various Industrial parks in the country, with a total of 12,535 employees and an average of Shs1,907,000,000 in monthly NSSF contributions. There were 20 entities/factories in Liao Shen Kapeeka Industrial Park. By December 2022, NSSF had registered 16 companies operating in the park, with a total of 1,808 employees and an average of Shs76,171,462 in monthly NSSF contributions. The other four companies in the industrial park were still under construction and not yet operational.

There was no evidence to support the allegation that the MD (Byarugaba) rejected initiatives proposed by the Minister and other Government officials to scale up registration of new members in industrial parks.”

Allegation Eight-False

Amongi alleged that Byarugaba attempted to defy the President Museveni’s directive in regard to the Yusuf Lule road Real Estate Project but the IGG rubbished this allegation in her report saying it is not true as Museveni was involved in the process.

The IGG established NSSF advertised a pre-qualification notice in March 2020, inviting suitably qualified bidders to submit applications for prequalification for the design and construction of the Yusuf Lule commercial development project. 12 bids were received but only four bidders met the prequalification criteria and were invited to bid. 

“The Evaluation Committee recommended China Railway Construction Engineering Group Co. Ltd as the best evaluated bidder with a total evaluated bid price of Shs198,558,921,170.98. This was way above the Shs123,600,000,000 that the Fund had budgeted for the project and the tendering process was cancelled. 

In September 2022, H.E the President directed that M/s SMS Construction Co. Ltd. be engaged to undertake the construction of the commercial development along Yusuf Lule road. Bid documents were issued to M/s SMS Construction Co. Ltd on December 6, 2022. The firm submitted the technical and priced bid on January 30, 2023. At the time this investigation commenced, the bids were yet to be evaluated.

The allegation that the MD attempted to defy the President’s directive was not true.”

Allegation Nine-False

Amongi alleged that Byarugaba’s disciplinary record was wanting, which the IGG disagreed with, only noting that Byarugaba was fond of using inappropriate language which was cautioned about.

Allegation 10- False

Amongi alleged there were irregularities in the procurement of the Pension Administration System (PAS) and whether there was a systemic failure that was not addressed but the IGG fond this to be false.

The IGG noted that NSSF issued an advert for the procurement of a Pension Administration System in June 2018, under open international bidding. The advert attracted five bidders. In February 2019, NSSF signed a contract agreement for delivery of the PAS with M/s Intrasoft International SA in joint venture with Sybyl Ltd that emerged the best evaluated bidders, at a contract sum of Shs15,278,352,941. The contract was to be performed within twelve months plus the six months stabilization period.

“At the time the PAS went live, the system was not stable and it experienced a lot of challenges. Although it underwent several successful tests, many of the features were not working as expected after going live. The post implementation review report carried out in April 2022 indicated that at the time of Go-Live, the system was marred with multiple challenges. These included concurrent user logins, inadequate controls within member process alterations and delayed statement offset as well as multiple benefits processing.

During the stabilization period, these issues were resolved by the vendor and the system has now stabilized to an acceptable level. However, the Compliance Module has not yet been implemented.”

Allegation 11- False

The Gender minister also alleged that NSSF staff were conniving with masquerader claimants for the Lubowa Housing land but the IGG found otherwise.

The IGG noted that NSSF purchased approximately 600 acres of freehold land in Lubowa area on different dates in 2003, 2004 and 2017 and parceled it out in 109 separate certificates of title. The Fund took vacant possession of the land after each purchase.

“From about 2006, several disputes and encroachments arose on various portions of the land and the disputes were forwarded to Court for determination. Out of the 14 cases that were forwarded to Court, judgment was delivered in the Fund’s favour in seven cases. One case was settled through an extra payment of Shs5,000,000 each to three individuals.”

The IGG further said the other six cases were still in Court, pending hearing. The Fund had not made any other payments to the encroachers apart from the extra payment of Shs15,000,000 and repatriation fee that was paid to the former occupants of the workers’ quarters.

The IGG included: “It was not true that the Fund irregularly offered compensation to encroachers on the Fund’s land at Lubowa.”

Allegation 12- False

Amongi alleged that Byarugaba caused financial loss to NSSF by selling a plot of land in Mbarara City that belonged to the Fund at less than themarket value.

On March 20, 2008, NSSF purchased a plot of land in Mbarara from Visa Properties Limited at a purchase price of Shs110,000,000. The plot was not developed.  NSSF later put up the above land for sale citing that it was no longer suitable for development by the Fund. The land was valued at Shs315,000,000 and Shs435,000,000 by the Chief Government Valuer and a private valuer respectively. Only one bid from Mr. Mwijusya Yafeesi with a proposed price of Shs365,000,000 met the reserve price of Shs363,000,000. The Committee recommended that the award of contract for the Mbarara plot be made to him. The sale was pending clearance of the Solicitor General and signing of the contract agreement.

“The allegation that the MD caused financial loss to the Fund by selling a plot of land in Mbarara City that belonged to the Fund at a price less than the market value was false,” the IGG concluded.

Allegation 13 -False

Amongi alleged that a kickback was paid to Byarugaba and the Investment Team of NSSF during the purchase of MTN and Quality Chemicals shares by NSSF but this was also dismissed by the IGG.

The IGG established that NSSF purchased 269,361,386 shares in Quality Chemicals worth Shs69,091,195,509 in September 2018 and 1,980,000,000 shares in MTN worth Shs360,000,000,000 in December 2021. Both purchases were done at IPO stage. “The purchases were in line with the existing policy and operational framework process at the Fund. The shares were acquired after valuation reports were presented to the MIC and duly approved as required.

There was no evidence to confirm the allegations that a kickback was paid to the MD and the Investment Team of NSSF during the purchase of MTN and Quality Chemicals shares.”

Allegation 14- False

The minister alleged M/s CATIC Construction Ltd paid a bribe to influence the award of the contract to construct the CITADEM Apartments to the Company but the IGG said the allegation could not hold any water.

The IGG established that In March 2014, NSSF contracted a procurement agent, M/s Agile Investments Ltd to source for an eligible contractor to undertake the designing and building of Mbuya Housing Estate-Phase II, under open domestic bidding.

M/s China National Aero Technology International Engineering Corporation and M/s Infrastructure Design Forum JV emerged the best evaluated bidders with a total evaluated price of Shs14,534,673,052 inclusive of taxes. NSSF entered into a contract with the firm for designing and building of Mbuya Housing Estate-Phase II on 23rd February, 2016. Analysis of payment records revealed that payments to M/s CATIC for the works were made between August 2016 and November 2021.

Mr. Mugabi stated that he already owned land in Kagadi with a residential house that he had built while still employed in Kagadi. He modified the house to Seyaya cottages much later after securing employment in Kampala. 

The IGG included: “There was no evidence to confirm that M/s CATIC Construction Ltd paid bribes to NSSF to influence the award of the contract for construction of the CITADEM Apartments.”

Allegation 15 -False

Amongi finally alleged that Byarugaba had been taking bribes that could be ascertained through cross border trails and whether he and his associates were beneficiaries of 5% commission paid by CRCEG, through De Point Consultants Ltd, a Bank in Mauritius, and finally to Barclays Bank in London. This allegation was seriously considered not true

The IGG said no evidence was obtained by Amongi to confirm the allegation that the Managing Director had been taking bribes and that he had gained through illicit enrichment and corruption.  “An analysis of local bank statements of Mr. Richard Byarugaba, CRCEG and De Point Consultants Ltd did not find evidence of monetary transfers between them,” the IGG concluded, leaving Amongi to learn some lessons.

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