Despite today’s reply from the Deputy Attorney General Mwesigye Rukutana that the Minister of Finance has no powers to remove Twebaze Bemanya, the Administrator of Uganda Telecom Limited (UTL) from office, State Minister for Privatisation and Investment insists that the official must be sacked from that office.

Anite in her second letter has written to the Attorney General, William Byaruhanga, saying that she instructed him to court to replace Bemanya.

“Refer to my letter of June 28, 2019…in regard to the captioned. I candidly instructed you as a Government lawyer to urgently apply to court to replace the current Administrator within the context of section 172 of the Insolvency Act, 2011 and Insolvency Regulations 161(1). The foregoing was after a decision had been taken by Government to remove Mr. Bemanya Twebaze, the official receiver and current administrator and immediately replace him with an individual that we will indicate,” reads part of Anite’s letter.

“The purpose of this letter is to implore you to have the petition to remove the Administrator of Uganda Telecom filed in Court without further delay,” she writes.

Anite says the reply from the Deputy Attorney General Rukutana was simply an opinion that could not stop Bemanya from being sacked. “I received a completely offside reply…from the Deputy Attorney General in regard to my instruction. I will respond to litany of fundamentally flawed innuendos…he listed separately. It is indeed surprising that your Deputy interpreted my communication as a request for opinion,” she writes.

Anite said Rukutana’s response points to a confirmation of a views shared in meeting chaired by her boss Matia Kasaija where it was said that Bemanya is crooked lawyer who is entrenched in Attorney General’s office. “It also points to a common view that a cartel in sections of government is keen to have UTL liquidated and sell to themselves the strategic assets of the company and people of Uganda.

In a letter dated June 26, 2019 and addressed to the Attorney General, Minister Anite directed him to get immediate get replacement for Bemanya, saying all the concerned parties have lost confidence in the administrator and therefore, can no longer work with him.

“Reference is made to the letter of the Hon Minister of Planning & Economic Development to you dated 20 June regarding Uganda Telecom Limited (UTL)… In effect, a decision has been taken to remove Mr Bemanya Twebaze, official receiver as the current administrator and to immediately replace him with an individual that we will indicate.

The purpose of this letter is to request you to urgently apply to Court to replace the current Administrator within the context of Section 172 of the Insolvency Act, 2011, and the Insolvency Regulations (161 (1)),” read the letter in part.

“I will be pleased to swear an Affidavit to support the Application where the supporting reasons will be elaborated. I implore you to have the petition filed without any delay to ensure that the Administration of the Company progresses without any issue. I will appreciate your prompt response,” she wrote.

In reply to the minister, the Deputy Attorney General Mwesigye Rukutana in a letter dated June 28, 2019 says: “I have noted with concern that you have encountered considerable difficulty dealing with the administrator and have completely lost in his ability to continue to serve in that capacity. Unfortunate as it sounds, under our law, the removal of an Administrator from office is provided for under Section (174) (1) (c), of the Insolvency Act. It is noteworthy that under the law, a creditor would be a person listed as competent to apply to court to remove an Administrator from office. Whereas government entities may be listed creditors they have separate legal status. Accordingly a shareholder in this instance the Minister of Finance Planning and Economic Development has no locus to apply to court to remover the Administrator from office.”

Rukutana in the letter says that the fact that Finance Ministry consented to the extension of the contractor of Bemanya on two occasions, is prove that he has been doing his duties as assigned. The minister could only sack him if he had failed to do his duties.

Rukutana has also told Anite that the Speaker of Parliament Rebecca Kadaga ruled on the same matter on June 2019 where she clearly said the Administration is the court-controlled process that can neither be interfered with by the legislature nor the executive. “In light of Right Hon. Speaker’s ruling on this matter, your instruction to me may be perceived as contempt of parliament,” he said.

He has further advised Anite to refrain from interfering in UTL’ administration, saying that the interference may hinder the process of sourcing for the funds to revive the telecom company. He says it may also lead to legal challenge by creditors but also attract liability on government.

As a recap, Mauritius Telecom was recommended to takeover UTL after it offered to invest US $100 million for three years with considered assets of US$45 million. The telecom firm the 6th last best evaluated bidder.

The Financial Intelligence Authority (FIA) in its due diligence report submitted to President Yoweri Kaguta Museveni cleared Mauritius Telecom as the “only credible and financially stable company among the evaluated companies.” Mauritius Telecom was considered as the last best evaluated basing on its capital of US$100 million and assets of US$45 million takes over UTL.

This recommendation drew queries since the best evaluated company from USA, Hamilton Telecom offered capital investment of US$285 million for a period of 3 years and its considered assets stand at US$70 million.

The other four evaluated companies include; Afrinet Communications Limited which proposed to inject US $150-$300 million with assets of US $67 million and acquiring 68 per cent of shares, Teleology Holdings with a consideration for assets of US $60.5 million and investing capital worth US $230 million and acquiring 67 per cent of shares, Neubacher Montage LLP offered assets of US $60 million and proposed capital investment of US $211 million taking 68 per cent of shareholding and lastly Baylis Consortium with US $55 million assets and US $120 million capital investment acquiring 70 per cent of shares for five years.

It must be noted that the total debts of UTL stand at US $147 million with five creditors who include; Government US $53.61m, NSSF US $2.84 million, ESATD/PTA Bank US $8.91 million, UCECPS US $3.34 million and others US $77.86 million.

It is against this backdrop t government tasked the line ministry, Ministry of Finance to seek for a potential investor to recapitalise UTL after the Libyans pulled out last year. UTL had been declared bankrupt.

The responsibility of hunting for a partner was handed over to Anite who through a court process placed UTL under an administrator because the company was financially distressed and technically insolvent.

Bemanya was appointed Administrator and tasked to make the company healthier and attract investment before sourcing for a strategic partner.

Conditions

Whereas the process was in advanced stages of selecting an investor to recapitalise UTL, several investors set conditions to partner and revamp the defunct parastatal.

Among the conditions include; extension of service license for 20 years, expansion of frequency bandwidth- spectrum, tax waivers on import duty for equipment for four to seven years, the resultant company to become the sole provider of ICT services to government and access and uses national backbone infrastructure.

17 companies showed interest in taking over the liabilities of UTL but only six were considered as the best evaluated to investment their capital and revamp the company.

The administrator, then requested the Financial Intelligence Authority headed by Sydney Asubo to institute an investigation on the six telecom firm to ascertain whether their financial muscle and capability to run UTL.

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1. A confidential report of the Presidential Tripartite Committee, authored February this year, has detailed how the Bank of Uganda (BoU) Governor, Emmanuel Tumusiime-Mutebile, personally recruited five senior staff without subjecting them to any interviews as required by law.

The staff who were externally recruited by Tummusiime-Mutebile are; Dr. Twinemanzi Tumubweinee (Executive Director Supervision), Mr. Valentine Ojangole ( Director Banking), Mr Edward Mugerwa (Director IT Operations Department), Ms. Kande Sabiiti (Procurement Assurance Manager/Director) and Dr. Natamba Bazinzi (Assistant Director Currency Administration in Currency Department).

The findings are as a result of investigation of allegations that Tumusiime-Mutebile recruited and promoted staff on February 7, 2018 without following the bank’s procedures as well as the Constitution of Uganda. The allegations were made by some of BoU senior staff.

The confidential report was authored by the committee appointed by President Yoweri Museveni to investigate the allegations against Tumusiime-Mutebile, following a public spat between him and Justice Irene Mulyagonja, the Inspector General of Government (IGG) who had intervened after former Executive Director of Supervision, Justine Bagyenda, petitioned upon being sacked by Tumusiime-Mutebile without giving any clear reasons as he published a memo on February 7, 2018.

The committee members that authored the report include; Abdu Katuntu (MP) and Chairperson, Lady Justice Irene Mulyagonja Kakooza, Elijah Okupa (MP), Michael Tusiime (MP), David Makumbi (IG Staff), Justus Kareebi (IG Staff) and Sarah Birungi (IG Staff) and committee secretary

The committee has documented how Tumusiime-Mutebile recruited and promoted the affected staff. However, for now, Eagle Online brings you details of how the governor brought external staff into BoU, causing discontent and uproar among the staff of Uganda’s regulator of the banking industry:

Dr. Twinemanzi Tumubweine

According to the report, on May 31, 2018, Tumubweinee informed the committee that he had been ‘head-hunted’ and requested by the Governor to express interest in the job. He claimed that his interaction with the Governor started in 2017 during the activities of the Financial Markets Development Committee of the Bank of Uganda. He explained that he attended the said committee as a stakeholder representative for the Uganda Communications Commission where he was previously employed. He also stated that he had authored a PhD dissertation under the title “Interest Spread and Emergency Setting Behaviour of Commercial Banks: Evidence from Uganda” in 2008 and that the Governor had asked him about it. As a result, Tumubweinee wrote to the Governor of Bank of Uganda on October 2, 2017 and expressing specific interest in joining the Banking Supervision Directorate of the Bank of Uganda.

The Governor subsequently wrote back to Tumubweinee on February 9, 2018 and offered him appointment as an Executive Director in charge of Supervision which appointment Tumubweinee accepted on February 14, 2018. Prior to this Tumubweinee had written another letter to the Governor on February 12, 2018 and requested that his employment terms be changed to permanent and pensionable which request the Governor accepted on February 22, 2018 Tumubweinee claimed that he requested for permanent and pensionable terms based upon his right to negotiate his terms and alluded to having received legal guidance on the matter.

Mr. Valentine Ojangole

On May 31, 2018 in an interview, Mr. Ojangole informed the committee that he was previously a member of staff at BoU but had left in 2007 to join private sector banking. He claimed that he had been encouraged by former colleagues to apply to rejoin Bank of Uganda and that as a result he had submitted an unsolicited application to rejoin the Bank of Uganda.

According to records derived from Ojangole’s personal file, he submitted an application for re-employment to the Governor dated September 6, 2017. This resulted in the Governor writing to offer an appointment on February 9, 2018 which offer Ojangole accepted on the same day with a request to be appointed on permanent and pensionable terms as a former staff. On February 22, 2018 the Governor wrote back to Ojangole and accepted his request for appointment on permanent and pensionable terms.

Mr Edward Mugerwa

May 31, 2018, Mr. Edward Mugerwa informed the Committee that he had submitted an unsolicited application for a position at BoU in 2017 having previously worked extensively in the telecom industry in the private sector. He claimed that he had submitted a CV to Bank of Uganda over a year earlier. According to records on Mugerwa’s personal file, he officially applied for a position at the Bank as Director IT Operations on February 3, 2018.

In his statement to the committee Mugerwa claimed that the first time he had heard back from the bank in light of his application of 2017 was by way of a phone call on a Saturday around February 6 or 7, 2018’. According to the report, he claimed that it was a lady who called him from the Human Resource Department but he could not recall her name. He further claimed that he was requested to submit another expression of interest because whereas his CV was still available the previous application he had submitted could not be traced.

Tumusiime-Mutebile subsequently wrote to Mugerwa on February 9, 2018 and offered him an appointment to the position for which he had applied. Mugerwa accepted the offer on February 12, 2018. However, he also requested to be appointed on permanent terms which request was approved by the Governor on February 22, 2018. Mugerwa informed the committee that his request for his terms to be varied was because he ‘knew that the bank has other terms of employment, that was permanent and pensionable’.

Ms. Kande Sabiiti

On May 13, 2018, Ms. Kande Sabiiti informed the committee that she had been taken on at BoU as a Procurement Assurance Manager having previously served as the Public Procurements and Disposal of Public Assets Authority (PPDA). She explained that during the course of her duties at PPDA she had noted a number of issues related to the procurement and disposal function at the bank which prompted her to write to the bank to request for ‘an opportunity to serve’. She stated that her application had been submitted sometime in 2017.

According to records available on Ms Sabiiti’s personal file, she wrote to the Governor on August 13, 2017 and applied for a procurement job opportunity at the Bank. On February 9, 2018, the Governor wrote back to Ms. Sabiiti and offered her an appointment as Procurement Assurance Manager, which appointment Ms. Sabiiti accepted on February 12, 2018 while also requesting for revision of her terms of employment from contract to permanent and pensionable. The Governor subsequently accepted the request for review of the terms on February, 22 2018.

With regard to the request to shift to permanent and pensionable terms, Ms. Sabiiti claimed that she had accessed the Human Resource procedures from which she had noted that she qualified for permanent and pensionable terms. Hence her request for her terms to be changed. She could not readily recall when she had looked at the Human Resource procedures.

Dr. Natamba Bazinzi

On May 31, 2018 the Committee met Dr. Natamba Bazinzi who had also been externally recruited by virtue of the Governor’s memo of February 7, 2018. When he was queried as to how he came to be appointed at the Bank, Dr. Bazinzi stated that around October 2017, he felt he needed to explore opportunities for growth in experience especially in the public sector and that as result he gave his CV to Bank of Uganda. He stated that at the time he gave in his CV he recalled that they gave out information related to financial inclusion. He then submitted his CV and expressed interest to provide ‘research knowledge consultancy’ related to financial inclusion.

Bazinzi emphasized that he had submitted his CV without the benefit of inside information. According to information available on Bazinzi’s personal file he wrote to the Governor on October 18, 2017 and applied for a position in the Currency Department at the bank. However, contrary to his statement to the committee there was no discernable expression of interest to provide consultancy services but rather a specific application for a position in a specific department of the bank.

When queried about why he was specifically interested in the Currency Department, Dr. Bazinzi claimed that he acquired a specific interest based on what he was reading in newspapers. He stated, “When you read what is published in newspapers, sometimes it is up to you as a reader to draw your own conclusions. In my conclusion, therefore, I said since financial inclusion is related to issues of having people open accounts in banks, then possibly this can be an issue of the currency department.”

“In all the cases for the externally recruited staff there was no indication of acknowledgment of receipt of any of their applications by the Bank. As such it was impossible to determine when and how exactly the applications were submitted to the Bank,” the report of the committee says.

Committee’ conclusion

According to the report, the Committee recommended that the ratification of the appointment of externally recruited persons into BoU should be handled by the Board of Directors as per their mandate under the Administration Manual and the Constitution. However, due to the prevailing situation characterized by suspicion and mistrust in the bank and in the interests of ensuring that any decision in this regard is free of any perception of bias, the committee also recommended that the ratification by the Board should involve an independent professional firm that is familiar with recruitment processes. “This firm would be expected to verify the qualifications and competences of the externally recruited persons against the official bank requirements and present a report to the Board. This firm could be sourced through the Ministry of Finance, Planning and Economic Development to ensure freedom from perception of bias and guard the integrity of the process,” it stated.

Click on the link below to read full report

BOU Tripartite Final

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