{UAH} Fw: [UNAANET] Ministers aid foreign investors to get loans - National - monitor.co.ug
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| From: mozkawaya@yahoo.com Sent: Sunday, November 24, 2013 11:20 To: Unaanet Reply To: UNAANET@yahoogroups.com Subject: [UNAANET] Ministers aid foreign investors to get loans - National - monitor.co.ug |
Ministers aid foreign investors to get loans
Top government officials, including a minister, messed up the operations of Uganda Development Bank (UDB) by helping 'friendly' investors and politically 'connected' individuals to access unsecured loans from the bank in breach of the financial regulations, MPs have said.
On account of failure to prevent the abuse of loans at UDB even after it occurred to the authorities that a bank meant to finance key development projects in the economy was instead being used as a "conduit" to fiddle public funds, Parliament wants Bank of Uganda investigated on accusations of being an "accomplice" in the scam.
Debating a key report on the operations of UDB (2001-2010) last week, the MPs named state minister for Labour Mwesigwa Rukutana, Secretary to the Treasury Keith Muhakanizi, BoU Governor Emmanuel Tumusiime-Mutebile among other senior government officials they want to be held responsible for the loss of billions of shillings.
"It's disheartening to see people stealing public money with impunity in the government I serve," minister Without Portfolio Richard Todwong said. "As Parliament, we need to recover monies stolen from government by individuals. The recommendations in the committee report are weak, we need to shake the monkeys out of the mango trees and preserve the mango trees."
Mr Rukutana, now in charge of the Labour, docket, is accused of using his office to help a Chinese investor through Jinda International Textiles Corporation (JITCO) access to $1.5million (about Shs3.7billion) from UDB in 2002, and an additional Shs2.7 billion within the same year. The loans are said to be non-performing.
However, Parliament recommended that the assets of non-performing borrowers that include GBK, Apparels Tri-Star, Phenix Logistics, Rutas Ltd and BM Technical Services Ltd among others, be attached to recover public funds.
Minister Rukutana is also accused of stopping the bank from recovering more than Shs5.3 billion from city businessman Hassan Basajjabalaba's Hides and Skins Company. Evidence shows that the minister on April 23, 2003 wrote to Dr Anthony K. Appiah, the bank's chief executive at the time, instructing him to "hold any recovery action". Parliament wants the minister to be held personally liable for causing the loss of taxpayer's money through what the Leader of Opposition in Parliament, Mr Nandala Mafabi called "influence peddling".
Mr Rukutana on Saturday scoffed at the MPs who accused him of interfering with the operations of the bank as "stupid and silly" and dismissed the accusations as "nonsense". He said the investors he forwarded to the bank were companies investing in strategic areas of the economy. "What I did, I was not doing it as Rukutana, but as a minister for Finance and I did nothing wrong. They can go and hang."
In faulting Mr Muhakanizi and other officials, the committee chairperson, Mr Patrick Oboi (FDC, Kumi), tabled letters, detailing how billions of shillings would be sent to the bank with "stern orders" for onward lending to 'pre-selected' investors and individuals.
"Gross interference by BoU and Ministry of Finance ruined the independent and professional running of the institution," Mr Oboi said.
BoU's acting director Communications, Christine Alupo defended Mr Mutebile and distanced BoU from the UDB mess. She said the central bank does not supervise UDB.
Bank used as a conduit?
However, Mr Abdul Katuntu (FDC, Bugweri) said: "What we see in this UDB scandal is reckless management of the bank and a criminal cartel running a criminal racket and using the bank as a conduit."
NRM MPs Medard Bitekyerezo (Mbarara Municipality) and Ms Huda Oleru (Yumbe) said one of the letters from Mr Muhakanizi sounds as if there was a "secret business relationship" between him and Mr Yuichi Kashiwada, a Japanese investor he "assisted" twice to secure public funds from the Bank as a conduit.
Mr Muhakanizi on February 8, 2002 wrote to UDB saying: "As you will recall sometime back, I told you government has decided to provide $1.5m (about Shs3 billion) to Ms Phinix (sic) to enable it manufacture and export garments under AGOA. I have learnt from Mr Kashiwada of Phinix that they needed $1m (about Shs2.5 billion) immediately and $0.5m (about Shs1.2 billion) later. I am now requesting you to apply for funds equivalent to $1m (about Shs2.5 billion) from this Ministry. " Six months later, Mr Muhakanizi wrote another letter instructing the bank to give Phenix investor an additional $87,857.14 (about Shs220.5 million). On March 18, 2010, Mr Muhakanizi wrote another letter to the bank stopping the recovery of Shs3.5 billion from Mr Basajjabalaba.
When contacted, Mr Muhakanizi denied any wrongdoing and wondered why the committee did not seek his side of the story. The Secretary to the Treasury said he was implementing the government decisions and that there is a Cabinet minute and a Parliament resolution.
The expenditures
Name Amount Beneficiary
Mwesigwa Rukutana Shs2.7b and Shs3.7 billion JITCO
Chris Kassami Shs 6.2 billion Apparels Tri-Star
Keith Muhakanizi Shs3.7 billion and Shs220.5m Phenix
Tumusiime Mutebile Shs24.5billion Basajjabalaba
Keith Muhakanizi Shs3.5b Basajjabalaba
Dr Anthony Appiah Shs7.7b UDB in FY 2001/02
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