NSSF ignores warning, buys Shs30 billion shares in Umeme

Workers have protested the purchase of Umeme shares by the National Social Security Fund (NSSF), saying the investment did not comply with legal requirements.

The workers, through their umbrella bodies; Central Organisation of Free Trade Unions - Uganda (COFTU) and National Organisation of Trade Unions (NOTU), allege that the investment which puts savers’ money at risk was
entered into without consent of the board and Solicitor General.

“We are thus compelled to seek remedial measures to guarantee the safety of workers’ money and to avoid reoccurrence of the same considering that a similar conduct led to a loss of colossal sums of money in the Nsimbe
project,” read a February 11, letter to Finance Minister Maria Kiwanuka and signed by the secretary general of the two unions, Mr Mazamiru Kibeedi.

Was buying Umeme shares illegal?
The joint letter that sought for a meeting with the minister followed a legal opinion by a city law firm, Kibeedi and Company Advocates, showing that ‘the acquisition of Umeme shares is “clearly illegal.”

“You are at liberty to seek both legal and political redress in case you feel that the workers’ monies are in peril. The intended goal will be to nullify the acquisition and get an immediate refund of the workers moneys to NSSF by Umeme,” the letter further read.

The lawyers also recommended that the workers at their wish could nullify the investment policy provisions which try to side-line the board.
“Board involvement is a matter of law and good practice. It is at the board level that the workers are represented and can therefore be assured of having a meaningful in-put in any investment decision,” Mr Kibeedi
wrote.

In a December 6, 2012 letter, the Solicitor General advised against the decision to purchase Umeme shares by NSSF.

In the letter to NSSF Corporation Secretary David Nambaale, the Solicitor General quoted the parliamentary ad hoc committee report on energy in which the power distributor is accused of poor performance and failure to properly manage assets inherited from government.

Too late to advise
“Kindly advise whether NSSF (still) wishes to precede with the proposed transaction with Umeme Ltd, regardless of what position the government might take,” reads the letter from the Solicitor General.

In another letter dated January 10, 2013, the Solicitor General’s office wrote: “Since the transaction(s) is already concluded, NSSF does not need the legal advice of this office. Seeking legal advice from this office is not a mere formality.”

Mr Nambaale declined to divulge information on the matter, saying “it is a complex one.”

“There are a lot of documents regarding that matter that need to be looked at before I comment,” Mr Nambaale said.
When contacted, NSSF Board Chairman Ivan Kyayonka, said: “That is not true,” and decline to answer any more questions before hanging up.

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