Uganda House fraud row deepens

Uganda House, the seat of the Milton Obote Foundation.

What you need to know:

Three of the six members present blocked a board meeting of Milton Obote Foundation because the minutes of the previous meeting had not been presented for approval.

Kampala

A board meeting of the Milton Obote Foundation (MOF) ahead of the crucial General Assembly conference on Tuesday ended prematurely on Thursday as the row over the botched Shs 3.9b loan escalated.

Three of the six members present blocked the meeting because the minutes of the previous meeting had not been presented for approval. The first item on agenda for the Thursday board meeting was to review and approve the minutes of the previous meeting, but a copy of the file presented to the board members for the meeting did not include the minutes of the previous meeting.

Protests erupted and members said should the board proceed without first approving the minutes of the previous meeting, the previous minutes would be abandoned.

Mr Celestine Ayepa, the MOF acting general manager and corporation secretary, on Friday said there was no plan to recall the board before the General Assembly on Tuesday.

Former Chwa County MP Livingston Okello-Okello, who was among the members who blocked the meeting, however, said he was ready for another meeting between Sunday and Monday as long as the minutes of the previous meeting were presented for approval.

Mr John Okumu and Prof Orach-Meza were the two who joined Mr Okello-Okello to block the Thursday meeting. Ms Miria Obote, the other member who has sided with the group in the ongoing impasse, did not attend the meeting.

Prof Patrick Rubaihayo, sources say, argued that the meeting should continue even without the previous minutes because the board was running out of time, but his pleas were rejected. He said, our sources say, that if the ordinary meeting of the board would not proceed without the minutes of the previous meeting being approved, the nature of the meeting should be changed from ordinary to extraordinary.

Prof Rubaihayo was a member of the Okello-Okello select committee that investigated the controversial loan but he neither signed the main report nor wrote his own minority report.

In the board meeting of February 26, however, he voted together with board chairman Ignatius Barungi, and Mr Chris Opio to quash the report on the dubious loan the MOF borrowed.

The contentious minutes of the previous meeting held on February 26, contain a board resolution to adopt the report of the select committee chaired by Mr Okello-Okello. The other committee members were Prof Patrick Rubaihayo and Prof Faustino Orach-Meza.

Genesis of Milton Obote Foundation crisis

Sunday Monitor broke the story two weeks ago of how the report, dated February 9, 2014, and titled “Irregularities associated with sourcing of $1.5m as equity fund for the Plot 10, Kampala Road Project,” had polarised Uganda House, the seat of Uganda Peoples Congress party.

The report accuses board chairman Ignatius Barungi, board member Chris Opio and former general manager C.D. Mindra of conniving to smuggle some information into the board minutes and basing on that to draft a board resolution authorising them to borrow money and mortgage MOF properties.

The three are further accused of mismanaging the loan of Shs3.9b from Mr Mahmud Bharwani. MOF borrowed the money and placed it on a fixed deposit account in Diamond Trust Bank after paying all the 12-month interest due to Mr Bharwani in advance.

The Shs3.9b was repaid to Mr Bharwani in seven months but no attempt was made to recover from him the interest for the remaining five months.
Mr Barungi admitted mistakes were made in handling the loan but he and Mr Opio denied culpability. He said MOF would recover from Mr Bharwani Shs155,786,301, the interest for the five months or 162 days to be exact which had been paid to him in advance. However, this sum was lower than the Shs843.2m the report says Mr Bharwani owes MOF.

It is not clear how preparations for the Tuesday MOF General Assembly, the supreme organ of the organisation, will be affected by the aborted Thursday meeting.

In the Thursday meeting, the board was supposed to approve the new MOF auditors for the next three years, who would then be presented to the General Assembly on Tuesday.

The General Assembly, according to newspaper notices, was called to elect new board members since the tenure of six of the current seven members has expired.
Mr Barungi said whoever leaked the matter to the media did it prematurely, arguing that the internal processes of the Foundation had not been fully explored. He said with the board having debated the report of the select committee chaired by Mr Okello-Okello, the matter was due to be forwarded to the MOF General Assembly for discussion.