Top army officers under probe over arms deal

Kampala- Military intelligence is investigating top army officers in connection with a fraud case in which a Polish company lost more than Euros520,000 (about Shs2b) in a fake procurement deal of military hardware.

Sources say the investigations team reportedly led by Col Herbert Mbonye, the deputy military intelligence chief, has concluded inquiry against a top army officer at the rank of brigadier and others for their alleged interest in a Ugandan shady company that obtained the money after disguising as Ministry of Defence contract agency.

The Polish firm, BMP Poland Z.o.o, paid the money as consultancy fee to Prima Investments Uganda that claimed to be contracted by the Defence ministry to get a company to supply 375 tanks specified as T-54, T-55, T-72, T-90s, PT-76, BMPs and 46 reconnaissance Ferret and Eland armoured cars.

The purported Defence ministry documents calling for bids and allegedly signed by a one Brig Akello Okuta, who is not known but signed as the head of Defence ministry of procurement, showed the ministry also wanted body armour, anti-riot equipment, 150 amoured personnel carriers and six ATMOS-2000 155 mm self propelled artillery pieces guns.

The same documents show Prima contacted BMP Poland Z.o.o through one Sam Kansiime to supply body armour and anti-riot equipment at Euros17million
In a dramatic turn of events, Prima Investments Uganda, which had positioned itself as the Defence ministry contracting agency, was later given powers of Attorney by BMP Poland Z.o.o to conduct business on its behalf.

The Polish company paid Euros 520,000 to Prima Investments Uganda as consultancy fees and released Euros7,000 to the same company to pay for bid documents.

Highly placed security sources said police had already arrested Mr Sam Simbwa, a suspect, but he has since been reportedly released from Special Investigations Unit in Kireka, Kampala, on the orders of the suspected brigadier.

But when contacted, police spokesperson Felix Andrew Kaweesi was noncommittal but promised to get back to Sunday Monitor on the issue.

When contacted yesterday, the army spokesperson, Lt Col Paddy Ankunda, said the suspected brigadier had denied the accusations.

But, what is surprising, according to the military sources is how the BMP Poland officials flew from Poland and held a meeting inside the tightly guarded Bombo Army Barracks boardroom with UPDF officers claiming to be members of Defence ministry procurement committee.

The organisers of the meeting told BMP Poland officials that the soldiers who attended the meeting would give a nod to the Euro17 million deal.
But Lt Col Ankunda said there was no such procurement process by the Defence ministry. He said procurement of such equipment in the military is always a kept secret and regarded as classified and closed to open bidding.

Prima Investments Uganda, according to its registration certificate, registered on April 5, 2005, and was given powers of attorney by BMP Poland on August 26, 2015.

“This is to confirm that we, BMP Poland Z.o.o, having registered office at Al. Jerozolimskie 65/79, 00-697 Warsaw, Poland, whose record is duly kept in the National Court Register under number KRS 0000449852 kept by Warsaw Regional Court, XII Commercial Section, hereby make Mr Sam Kansiime, the CEO of Prima Investments Uganda holder passport No. BO483242 to be our true and lawful attorney,” Marek Celer, the CEO of BMP Poland, wrote on August 26, 2015.

When he was contacted yesterday, Mr Celer hung up the phone and didn’t respond to text messages sent to him. Prima Investments Uganda also presented documents showing that Equity Bank had given them a guarantee.

“We on behalf of BMP Poland Z.o.o hereinafter called the principal had bided under bid reference No: UG/MOD/MTD/2015-16/00726 dated 02/09/15 for the supply of anti-riot equipment and body armour,” a letter to the Defence ministry read.

“Furthermore, we understand that according to the conditions, a bid security is required. At the request of the principal, we the guarantor hereby irrevocably undertake to pay you one per cent of the total volume of the contract upon receipt of your first demand in writing and your written statement,” it adds.

On the same day, another letter written and signed by Equity Bank head of claims and risk management, Mr Frank Mbarebyeki, showed Equity Bank had paid Euros179,000 as bid security to the Defence ministry.

Sources say the army leadership held a meeting last week at the Kampala Serena Hotel and decided to handle the issue quietly because it was embarrassing to the UPDF.

In one of the letters, Mr Celer wrote saying BMP Poland was in touch with Equity Bank to get footage of CCTV cameras of the person who withdrew the money the Polish company wired to Prima Investments Uganda’s bank account in Equity.

Mr Celer also said they had contacted the bank to recover money they paid for security bond. “But the bank has replied that there is no enough money on Prima Investments Uganda account,” Mr Celer added.

The managing director of Equity Bank, Mr Sam Kirubi, could not be reached for a comment as his phone remained busy neither did he reply to our text messages.

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