cronysm and corruption in Uganda
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Jamwa’s letter to Museveni on Temangalo- NSSF deal
Posted in: News
By
Oct 20, 2008 - 1:44:34 AM
29th September 2008
Your Excellency Mr President, Sir
Introduction
It’s painful and a regret for me to bring the real truth to your attention about the Temangalo land deal. However, as a humble Civil servant I am obliged to do so without fear of favour.
The issue at hand in the transaction is that there was influence peddling and political interference. NSSF was under pressure to execute the transaction.
As the MD of NSSF it’s my job to prepare investment proposals for consideration and approval by the Board of Directors (BOD), the Minister of Finance, Planning and Economic development (MOFPED) and the Solicitor General (SG).
My job description that is in line with the NSSF Act does not include either approval or authorisation of investments. This power lies with the three authorities mentioned above. The NSSF MD is the implementer of the decisions of the policy maker and not the approver.
In this matter therefore, the position of the MD as the implementer puts me in a vulnerable position to implement inappropriate actions of the policy makers who may have embedded interests in specific investment activities that they may approve.
Further, as the key generator of investment proposals, the NSSF MD can also be exposed to undue influence in the investment proposal generation process where interested policy makers may coerce the NSSF MD to include specific investment proposals in which they may have embedded interests in the approval pipeline.
In this case under consideration, I attest that at both levels, that is during the investment proposal generation process, I was under pressure from various parties with interest in the transaction to have it cleared it at [all] costs. This pressure was unmanageable and way beyond my practical administrative power position.
Role of MOFPED matter
On the evening of January 9, 2008 after the WARID ceremony at Munyonyo which you launched, the MOFPED in the company of his wife bumped into me and he asked me to spare him a few minutes to discuss important matters pertaining NSSF. He excused his wife to have a private conversation with me and we sat on the external customer tables, right after the new Hotel complex lobby area next to the moat.
MOFPED
In the conversation we had, the Minister asked me to help him and his fellow local shareholders in the National Bank of Commercial Limited (NBC) to “save their bank” by buying the Temangalo land from his two colleagues.
He explained that the majority shareholders at the time (a group of Indians) were desperate to sell their 86.23% of the bank to a group of Nigerians unless the local shareholders could come up with $7 million to purchase the stake from them instead. He indicated that apparently the Nigerians had offered the Indians $9 [million].
The MOFPED added that he and his fellow local shareholders in NBC were under significant pressure to buy this stake from the Indians, and only NSSF could bail them out.
I informed the Minister that the Temangalo land purchase was far from complete as a number of titles presented to the NSSF by the sellers were not legally “clean”, and NSSF had asked for replacement land that was buyable from the sellers. I further told him that by that time no replacement land titles had been received.
The MOFPED requested me get the sellers to speed things up, to which I obliged. The MOFPED then told me that if I executed the Temangalo transaction for him, then he would also do me a favour.
The MOFPED urged me that in order to ease the financial pressure he faced with his colleagues, to put him in consideration and in the meantime deposit Shs15 billion Tropical Bank as collateral for a short-term loan that Tropical Bank would forwad to the Temangalo land sellers, so they could pay for the Indians stake in NBC, that would be repaid once NSSF paid the purchase price for the Temangalo land.
I obliged but only up to the level of UGX 10 billion. However, later after reflection I found this line of action extremely risky for NSSF members’ funds and eventually declined to go through with the instruction from the MOFPED. The MOFPED also inquired from me the progress on NSSF’s investigation into NEC for the purposes of investing in 40% of NBC’s share capital.
I informed the MOFPED that the progress on the same was minimal as the procurement process of the reporting accountants to perform a due diligence on and a valuation of NBC was not expected to finish until the following month (February, 2008). The MOFPED asked to speed up the procurement process to which I obliged.
The MOFPED asked me to focus on having both of the above transactions expedited and keep him informed of the progress. At this juncture our discussion that lasted an hour and half came to an end [and] the MOFPED proceeded to leave.
In May 2008 the MOFPED raised me in my office to ask about the progress of NSSF planned purchase of 40% of NBC shares. I updated the Minister that progress on the same especially in the area of evaluation had been stifled by NBC management failure to provide the necessary information (specifically financial projections).
The Minister assured me that he would follow up this deficiency with the NBC chairman (who was the Main seller of the land). Please note that to date, this investigation into NBC has been aborted by NSSF as NBC management has failed to provide the necessary information to the reporting accountants to enable them value NBC. It should also be noted that NSSF is still coming under pressure from the NBC chairman to revive the process.
In summary, the MOFPED exercised significant political pressure and influence on me
•Generate the investment proposal for the purchase of the Temangalo land; and
•Expedite the execution of the purchase transaction in a rushed timeframe including paying before the land was regularised to meet his own personal business needs that he shared with both of the sellers of the land.
Further MOFPED exercised significant political pressure and influence on me to commence an investment proposal process for NSSF purchase of 40% of the share capital of NEC, a bank in which the MOFPED and the two sellers are key share holder, and from which they would be expected to accrue sizeable personnel gain.
The role of Main seller (NBC Chairman)
As much as the main seller of the Temangalo land is not a public official, per se, he, in fact was also able to exercise considerable political pressure on me in terms of the Temangalo land and NBC shares purchase transactions.
I first met the main seller at an NSSF cocktail to commemorate our purchase of shares in Serena Kampala Hotel that was one of the first successful investments under my watch at NSSF.
The main seller immediately floated the Temangalo land deal to me at this first meeting, saying the offer price was Shs35 million per acre.
I informed the main seller that the offer price sounded quite high, but before we did inspections, valuations and due diligence we could not form an opinion on the same. I advised the Main seller to contact our investment department for more details.
From the meeting, and over the course of 2007 to date, the Main seller commenced exerting political pressure on me as follows:
•In a quite intimidating fashion, the main seller would tell him how close he is to you, Mr President, Sir. He mentioned having constructed your Rwakitura home, divulging to me intimate details of the layout of your house, and who sleeps in which bedroom;
•He boasted of always hosting you, Mr President, Sir, in his Kabale home or Hotel, whenever you travel there, adding that that was because he is your close confidant. Many a time he has shown me various numbers on his mobile phone claiming that they were calls from you, Mr President, Sir.
• He also declared that he a close friend of the First Lady and provided immense assistance to her in her campaigns for MP of her home area;
•Further he claimed he knew State house and all the people who work there, especially the secretaries, like the back of his hand;
•He informed me that every election he is a key contributor/raiser of campaign funds for the NRM;
• He also claimed very close relations with the Main seller (Minister of Security) whom he said is your right hand man and on whom the smooth running of this country rests.
The political pressure reached a crescendo over the period from December 2007 to the time of the Temangalo transaction execution on March 10, 2008. In December 2007 the Main seller claimed that the Minister of Security had asked you, Mr President, Sir, for permission to sell his land to NSSF.
The main seller further added that you, Mr President, Sir, had approved the this sale and even advised on the composition of the land valuers that, apparently you noted, Mr President, Sir, was only comprising land valuers from the Bakiga tribe, and it should incorporate and internal land valuer as well. It is on this information that NSSF switched to Knight Frank from Mr Byokuseka’s firm.
The Main seller assured me that the Ministry of Security and MOFPED would provide me with all the necessary political protection in terms of the Temangalo land transaction, and back up protection would be provided by some other politically connected shareholders in NBC e.g. the Governor, Bank of Uganda, the Minister of Internal affairs and my Deputy. In his own words he said “You couldn’t have chosen a better group to deal with.”
The above political pressure was, between January and March 2008, further exacerbated by the financial pressure the sellers were coming under from Tropical Bank, from whom they had borrowed UGX 10.5 billion to clear the Indian majority share holders in NBC.
Over this period, the main seller literally lived in my office! Moving back on forth, trying to clear all our due diligence points for transaction to proceed. I can assure you, Mr President, Sir, the pressure was almost atmospheric!
In summary, the Main seller (NBC Chairman) exercised great political pressure and influence on me to;
- Generate the investment proposal for the purchase of the Temangalo land; and
- Expedite the execution of the purchase transaction in a rushed timeframe including paying before the land was regularised to meet his own personal business needs that he shared with both of the sellers of the land.
To meet his own personal business needs, that he shared with both the MOFPED and Minister of Security. Further, the Main seller exercised significant political pressure and influence on me to commence an investment proposal for NSSF’s purchase of 40% of the share capital of NBC a Bank in which he, the MOFPED and Minister Security are key share holders and from which they would be expected to accrue sizeable personal gain.
Minor seller (Minister of Security)
Although I never at any one time, had direct contact with the Minister of Security, save for casual chat on a plane trip back to Entebbe from Nairobi in August 2008 (five months after the Temangalo land transaction had been completed), the manifestation of his political power and closeness to you Mr President, Sir, as put by the Main seller was pressure enough.
Pressure Management on my part
Given the immense amount of pressure exerted on me to execute Temangalo land and NBC shares purchase transaction, only two options were open for me to keep a sensible balance for the sake of the safety of NSSF member funds.
• In the first place, I had to ensure that the investments made economic and value sense for NSSF. In [the] case of Temangalo, I ensured that I cut the seller price down from Shs35 million per acre to Shs24 million per acre that was very reasonable given market prices for that area at around the time of transaction (March 2008), were in the region of Shs30 million per acre.
Further, the planned project for Temangalo i.e. that of 5,000 unit low cost residential housing estate is an extremely viable project that would not only contribute significantly to your vision of every Ugandan owning a house, Mr President, Sir, but would also provide significant economic velocity to the construction and housing industry in Uganda by creating over 15,000 jobs. US $97.5 million project in itself is planned to earn the NSSF members a margin of 37% on the US dollar that is in obsolete terms would translate to US $36 million over 6-7years.
• Secondly I had to rely on the third parties to ease the pressure that worked very well for the intended NSSF investment in 40% of NBC share capital, as reporting accountants were unable to satisfy themselves as to the value of NBC that served as a good excuse to abort the investment investigations.
In the case of Temangalo, my first pressure management point was the Board that is charged with the responsibility to approve NSSF investments.
To my surprise and even after one of the Directors, during the Board meeting to consider Temangalo, raised the issue of political pressure, the Board disregarded his concern and approved the transaction. It has now come to light that the NSSF Board has multiple conflicts of interest and linkages with the MOFPED as follows;
• Two Board members (i.e. Professor Kagonyera and Dr Kabumba) are share holders together with the Minister of Finance in NBC.
• The two other Board members (i.e. Mr Gaamuwa the Chairman and Ms Acigwa) are share holders together with the Minister of Finance in a micro-finance institution (Ugafode).
• Four Board members Mr Gaamuwa, Dr Kabumba, Ms Acigwa and Mr Olwenyi attend the same church as the Minister of Finance.
It’s no surprise now that the Board was unable to provide adequate independent challenge to the whole Temangalo land transaction.
My second pressure management point on Temangalo transaction should have been the Minister of Finance himself. It usually takes to an average, close to six weeks for the Minister of Finance to approve the investments that the Board Chairman submits to him.
In the case of the Temangalo land transaction, the Board Chairman submitted investments for approval and it was approved in two weeks time.
My last pressure management point was the Solicitor General on whom I relied to raise legal issues with transaction especially in the areas of political correctness, conflict of interest and PPDA compliance.
The Solicitor General happily approved the transaction with no mention, whatsoever of the three areas of concern above. It is rumoured that the Main seller has good connections in the Solicitor General’s office.
I should say, as well Mr President, Sir, that I have been dismayed at the several attempts made by the Minister of Finance and the Vice President without your specific clearance to have me unceremoniously suspended for Temangalo land transaction given the hard facts I have provided.
Surely I am worth more to this country than being a sacrificial lamb in the middle of a web of politically fuelled conspiracy and self enrichment.
© Copyright 2008 by Monitor Online
Jamwa’s letter to Museveni on Temangalo- NSSF deal
Posted in: News
By
Oct 20, 2008 - 1:44:34 AM
29th September 2008
Your Excellency Mr President, Sir
Introduction
It’s painful and a regret for me to bring the real truth to your attention about the Temangalo land deal. However, as a humble Civil servant I am obliged to do so without fear of favour.
The issue at hand in the transaction is that there was influence peddling and political interference. NSSF was under pressure to execute the transaction.
As the MD of NSSF it’s my job to prepare investment proposals for consideration and approval by the Board of Directors (BOD), the Minister of Finance, Planning and Economic development (MOFPED) and the Solicitor General (SG).
My job description that is in line with the NSSF Act does not include either approval or authorisation of investments. This power lies with the three authorities mentioned above. The NSSF MD is the implementer of the decisions of the policy maker and not the approver.
In this matter therefore, the position of the MD as the implementer puts me in a vulnerable position to implement inappropriate actions of the policy makers who may have embedded interests in specific investment activities that they may approve.
Further, as the key generator of investment proposals, the NSSF MD can also be exposed to undue influence in the investment proposal generation process where interested policy makers may coerce the NSSF MD to include specific investment proposals in which they may have embedded interests in the approval pipeline.
In this case under consideration, I attest that at both levels, that is during the investment proposal generation process, I was under pressure from various parties with interest in the transaction to have it cleared it at [all] costs. This pressure was unmanageable and way beyond my practical administrative power position.
Role of MOFPED matter
On the evening of January 9, 2008 after the WARID ceremony at Munyonyo which you launched, the MOFPED in the company of his wife bumped into me and he asked me to spare him a few minutes to discuss important matters pertaining NSSF. He excused his wife to have a private conversation with me and we sat on the external customer tables, right after the new Hotel complex lobby area next to the moat.
MOFPED
In the conversation we had, the Minister asked me to help him and his fellow local shareholders in the National Bank of Commercial Limited (NBC) to “save their bank” by buying the Temangalo land from his two colleagues.
He explained that the majority shareholders at the time (a group of Indians) were desperate to sell their 86.23% of the bank to a group of Nigerians unless the local shareholders could come up with $7 million to purchase the stake from them instead. He indicated that apparently the Nigerians had offered the Indians $9 [million].
The MOFPED added that he and his fellow local shareholders in NBC were under significant pressure to buy this stake from the Indians, and only NSSF could bail them out.
I informed the Minister that the Temangalo land purchase was far from complete as a number of titles presented to the NSSF by the sellers were not legally “clean”, and NSSF had asked for replacement land that was buyable from the sellers. I further told him that by that time no replacement land titles had been received.
The MOFPED requested me get the sellers to speed things up, to which I obliged. The MOFPED then told me that if I executed the Temangalo transaction for him, then he would also do me a favour.
The MOFPED urged me that in order to ease the financial pressure he faced with his colleagues, to put him in consideration and in the meantime deposit Shs15 billion Tropical Bank as collateral for a short-term loan that Tropical Bank would forwad to the Temangalo land sellers, so they could pay for the Indians stake in NBC, that would be repaid once NSSF paid the purchase price for the Temangalo land.
I obliged but only up to the level of UGX 10 billion. However, later after reflection I found this line of action extremely risky for NSSF members’ funds and eventually declined to go through with the instruction from the MOFPED. The MOFPED also inquired from me the progress on NSSF’s investigation into NEC for the purposes of investing in 40% of NBC’s share capital.
I informed the MOFPED that the progress on the same was minimal as the procurement process of the reporting accountants to perform a due diligence on and a valuation of NBC was not expected to finish until the following month (February, 2008). The MOFPED asked to speed up the procurement process to which I obliged.
The MOFPED asked me to focus on having both of the above transactions expedited and keep him informed of the progress. At this juncture our discussion that lasted an hour and half came to an end [and] the MOFPED proceeded to leave.
In May 2008 the MOFPED raised me in my office to ask about the progress of NSSF planned purchase of 40% of NBC shares. I updated the Minister that progress on the same especially in the area of evaluation had been stifled by NBC management failure to provide the necessary information (specifically financial projections).
The Minister assured me that he would follow up this deficiency with the NBC chairman (who was the Main seller of the land). Please note that to date, this investigation into NBC has been aborted by NSSF as NBC management has failed to provide the necessary information to the reporting accountants to enable them value NBC. It should also be noted that NSSF is still coming under pressure from the NBC chairman to revive the process.
In summary, the MOFPED exercised significant political pressure and influence on me
•Generate the investment proposal for the purchase of the Temangalo land; and
•Expedite the execution of the purchase transaction in a rushed timeframe including paying before the land was regularised to meet his own personal business needs that he shared with both of the sellers of the land.
Further MOFPED exercised significant political pressure and influence on me to commence an investment proposal process for NSSF purchase of 40% of the share capital of NEC, a bank in which the MOFPED and the two sellers are key share holder, and from which they would be expected to accrue sizeable personnel gain.
The role of Main seller (NBC Chairman)
As much as the main seller of the Temangalo land is not a public official, per se, he, in fact was also able to exercise considerable political pressure on me in terms of the Temangalo land and NBC shares purchase transactions.
I first met the main seller at an NSSF cocktail to commemorate our purchase of shares in Serena Kampala Hotel that was one of the first successful investments under my watch at NSSF.
The main seller immediately floated the Temangalo land deal to me at this first meeting, saying the offer price was Shs35 million per acre.
I informed the main seller that the offer price sounded quite high, but before we did inspections, valuations and due diligence we could not form an opinion on the same. I advised the Main seller to contact our investment department for more details.
From the meeting, and over the course of 2007 to date, the Main seller commenced exerting political pressure on me as follows:
•In a quite intimidating fashion, the main seller would tell him how close he is to you, Mr President, Sir. He mentioned having constructed your Rwakitura home, divulging to me intimate details of the layout of your house, and who sleeps in which bedroom;
•He boasted of always hosting you, Mr President, Sir, in his Kabale home or Hotel, whenever you travel there, adding that that was because he is your close confidant. Many a time he has shown me various numbers on his mobile phone claiming that they were calls from you, Mr President, Sir.
• He also declared that he a close friend of the First Lady and provided immense assistance to her in her campaigns for MP of her home area;
•Further he claimed he knew State house and all the people who work there, especially the secretaries, like the back of his hand;
•He informed me that every election he is a key contributor/raiser of campaign funds for the NRM;
• He also claimed very close relations with the Main seller (Minister of Security) whom he said is your right hand man and on whom the smooth running of this country rests.
The political pressure reached a crescendo over the period from December 2007 to the time of the Temangalo transaction execution on March 10, 2008. In December 2007 the Main seller claimed that the Minister of Security had asked you, Mr President, Sir, for permission to sell his land to NSSF.
The main seller further added that you, Mr President, Sir, had approved the this sale and even advised on the composition of the land valuers that, apparently you noted, Mr President, Sir, was only comprising land valuers from the Bakiga tribe, and it should incorporate and internal land valuer as well. It is on this information that NSSF switched to Knight Frank from Mr Byokuseka’s firm.
The Main seller assured me that the Ministry of Security and MOFPED would provide me with all the necessary political protection in terms of the Temangalo land transaction, and back up protection would be provided by some other politically connected shareholders in NBC e.g. the Governor, Bank of Uganda, the Minister of Internal affairs and my Deputy. In his own words he said “You couldn’t have chosen a better group to deal with.”
The above political pressure was, between January and March 2008, further exacerbated by the financial pressure the sellers were coming under from Tropical Bank, from whom they had borrowed UGX 10.5 billion to clear the Indian majority share holders in NBC.
Over this period, the main seller literally lived in my office! Moving back on forth, trying to clear all our due diligence points for transaction to proceed. I can assure you, Mr President, Sir, the pressure was almost atmospheric!
In summary, the Main seller (NBC Chairman) exercised great political pressure and influence on me to;
- Generate the investment proposal for the purchase of the Temangalo land; and
- Expedite the execution of the purchase transaction in a rushed timeframe including paying before the land was regularised to meet his own personal business needs that he shared with both of the sellers of the land.
To meet his own personal business needs, that he shared with both the MOFPED and Minister of Security. Further, the Main seller exercised significant political pressure and influence on me to commence an investment proposal for NSSF’s purchase of 40% of the share capital of NBC a Bank in which he, the MOFPED and Minister Security are key share holders and from which they would be expected to accrue sizeable personal gain.
Minor seller (Minister of Security)
Although I never at any one time, had direct contact with the Minister of Security, save for casual chat on a plane trip back to Entebbe from Nairobi in August 2008 (five months after the Temangalo land transaction had been completed), the manifestation of his political power and closeness to you Mr President, Sir, as put by the Main seller was pressure enough.
Pressure Management on my part
Given the immense amount of pressure exerted on me to execute Temangalo land and NBC shares purchase transaction, only two options were open for me to keep a sensible balance for the sake of the safety of NSSF member funds.
• In the first place, I had to ensure that the investments made economic and value sense for NSSF. In [the] case of Temangalo, I ensured that I cut the seller price down from Shs35 million per acre to Shs24 million per acre that was very reasonable given market prices for that area at around the time of transaction (March 2008), were in the region of Shs30 million per acre.
Further, the planned project for Temangalo i.e. that of 5,000 unit low cost residential housing estate is an extremely viable project that would not only contribute significantly to your vision of every Ugandan owning a house, Mr President, Sir, but would also provide significant economic velocity to the construction and housing industry in Uganda by creating over 15,000 jobs. US $97.5 million project in itself is planned to earn the NSSF members a margin of 37% on the US dollar that is in obsolete terms would translate to US $36 million over 6-7years.
• Secondly I had to rely on the third parties to ease the pressure that worked very well for the intended NSSF investment in 40% of NBC share capital, as reporting accountants were unable to satisfy themselves as to the value of NBC that served as a good excuse to abort the investment investigations.
In the case of Temangalo, my first pressure management point was the Board that is charged with the responsibility to approve NSSF investments.
To my surprise and even after one of the Directors, during the Board meeting to consider Temangalo, raised the issue of political pressure, the Board disregarded his concern and approved the transaction. It has now come to light that the NSSF Board has multiple conflicts of interest and linkages with the MOFPED as follows;
• Two Board members (i.e. Professor Kagonyera and Dr Kabumba) are share holders together with the Minister of Finance in NBC.
• The two other Board members (i.e. Mr Gaamuwa the Chairman and Ms Acigwa) are share holders together with the Minister of Finance in a micro-finance institution (Ugafode).
• Four Board members Mr Gaamuwa, Dr Kabumba, Ms Acigwa and Mr Olwenyi attend the same church as the Minister of Finance.
It’s no surprise now that the Board was unable to provide adequate independent challenge to the whole Temangalo land transaction.
My second pressure management point on Temangalo transaction should have been the Minister of Finance himself. It usually takes to an average, close to six weeks for the Minister of Finance to approve the investments that the Board Chairman submits to him.
In the case of the Temangalo land transaction, the Board Chairman submitted investments for approval and it was approved in two weeks time.
My last pressure management point was the Solicitor General on whom I relied to raise legal issues with transaction especially in the areas of political correctness, conflict of interest and PPDA compliance.
The Solicitor General happily approved the transaction with no mention, whatsoever of the three areas of concern above. It is rumoured that the Main seller has good connections in the Solicitor General’s office.
I should say, as well Mr President, Sir, that I have been dismayed at the several attempts made by the Minister of Finance and the Vice President without your specific clearance to have me unceremoniously suspended for Temangalo land transaction given the hard facts I have provided.
Surely I am worth more to this country than being a sacrificial lamb in the middle of a web of politically fuelled conspiracy and self enrichment.
© Copyright 2008 by Monitor Online
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