Monday July 28 2014

Lawmakers earn Shs165m from Umeme shares deal


The Parliamentary Pension Scheme has earned Shs165 million in dividends from its shareholding in power distribution company, Umeme Limited, the Daily Monitor can reveal.
Ms Hellen Kaweesa, the Parliament spokesperson, confirmed the development, saying the investment in Umeme shares must have been reached after thorough consultations.
The scheme invested Shs1 billion to buy Shs4.1m shares in Umeme during the Initial public offering (IPO) of the company in November 2012.

At the time, the price of each share was at Shs275 but has since appreciated to Shs400 as of last week.
The savings scheme covers MPs and staff in the parliamentary service.
It was established in 2008 following the passing of the Parliamentary Pensions Act, 2007 and has doubled to Shs55.5 billion from Shs20.44 billion as of this year, according to the Auditor General’s Report on the Parliamentary Pensions Scheme’s Financial Statements for the financial year 2012.
So far, the scheme has received three dividend cheques from Umeme amounting to a net of Shs141 million after tax.
The value of their shares has also appreciated from Shs1 billion to Shs1.7 billion in less than three years.

“The scheme bought the shares at Shs275 per share and a share is now at Shs405. There has been a capital gain of Shs125 per share since the IPO discounted price of Shs275, which amounts to up to Shs513 million.”
“As a member I think the investment in Umeme is worth it,” Ms Kaweesa said when contacted last week.
“The trustee of the pension scheme (which is made up of MPs representation) must have considered all possible risks before investing. Besides, our pension scheme is an independent entity that takes independent decision for the interest of its members,” she added.

Yet to comment
Ms Jane Kibirige, the Parliament Clerk, told the Daily Monitor last week that she was out of the country and can only talk about the matter when she is back.
“I cannot tell you anything or confirm anything because I am not in the country,” she said.
MPs have been critical of NSSF’s investment in Umeme shares.
Aruu County MP Odonga Otto, one of the critics of Umeme, refused to accept that the scheme where he is a member bought into the power distribution shares.

“This cannot be true. Umeme is a broke company. “That information is not accurate. Somebody must be feeding you with propaganda,” he said.
But on March 27 this year, Parliament recommended that the contracts of Umeme and Eskom be terminated.
This followed recommendation of the Adhoc Committee on Energy on the performance of the electricity sub-sector in Uganda.

The committee recommended that “the contract should be terminated” due to the gross legalities and manipulations encountered in the procurement of the Umeme Concession and the scandalous provisions of these power distribution agreements signed between Government and Umeme Limited.
Last week, the Speaker of Parliament, Ms Rebecca Kadaga, named a committee of five to investigate the National Social Security Fund over alleged irregularities at the Fund, including its decision to invest in Umeme.