Bosses take fat pay as UTL sinks

Friday March 03 2017
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One of the UTL offices in Kampala. FILE PHOTO.

Kampala. For years, Libyans and other senior managers at Uganda Telecom (UTL), with the knowledge of ministry of Finance officials, paid themselves handsomely and enjoyed free water and electricity, schools fees for their children and housing allowances, Saturday Monitor can reveal.
Although the company managing director (MD), Mr Mark Shoebridge, blames thieving and other fraudulent practices by UTL employees alongside a mountain of debt that distressed the company, Saturday Monitor investigations, however, point to what sources and MPs have called “obscene pay” of the top bosses and a long spell of financial indiscipline.

For instance, UTL staff payroll for October 2016 shows that the top four managers – the MD, the Chief Finance Officer, the Chief Legal Officer, and Chief Commercial Officer – earn a combined salary of $95,583 (almost Shs400 million) per month.
The MD earns a gross salary of Shs121m per month, followed by the Chief Finance Officer, Mr James Wilde, who pockets Shs95.2m. Mr David Nambale, the Chief Legal Officer, takes Shs90.5m, and Mr Ameer Kamal Arif, the Chief Commercial Officer, walks away with Shs76.4m.
Like other employees, Mr Kamal, a Libyan national who earns a salary of almost Shs50 million per month, is also entitled to housing allowance of more than Shs11.9 million, acting allowance of 12.3million, schools fees of about Shs3m, water and electricity of Shs3m per month. However, it’s not clear whether school fees allowance is paid to the top managers per month or per term/semester.

Removing the lid
In an interview with Saturday Monitor, Mr Nandala Mafabi (FDC, Budadiri West), who blew the whistle on the alleged mismanagement and financial indiscipline at UTL, complained about “obscene salaries” and explained that “despite the UTL bleeding and being in a financial crisis, the telecom top managers have continued to pay themselves huge salaries and allowances on top of other benefits.”
Mr Mafabi on November 17 last year informed Parliament that the UTL chairman board of directors, Mr Stephen Kaboyo, had his allowance increased from a net of $1,500 (Shs5.1m) to a net of $5,000 (Shs17.2million) per month with effect from September 2016.
His fellow board member, Mr Moses Mwasa, remained at $1,000 (Shs3.5million) per month. This is on top of other allowances that they get.”

Realising that UTL was on its deathbed, the Libyans, who controlled 69 per cent stake in the company, pulled out, compelling the government to repossess the troubled company. The debt-stricken telecom where government owned 31 per cent stake, is now on the verge of collapse should government fail to invest or find a risk-taker, who is willing to inject in excess of $48m (more than Shs172.5b) into the company.
The salaries for the top four managers combined, is about a third of the total salary bill for the entire company of about 500 employees. These salaries, according to Mr Mafabi and members of the House Select Committee investigating what has now become a scandal, must be among the highest for such staff in any company in Uganda.
“These acts by UTL top management are further weighing on to fast-track UTL’s death.”

Although the company introduced some cost-cutting measures, including cutting down the number of expatriates from eight to two, the UTL board of directors and the top management continued to enjoy huge perks at the expense of the low-cadre staff. Besides, Mr Mafabi told Parliament that the mileage allowance that operational staff used to get for field work in the absence of company transport was recently removed in the name of cost cutting, including provision of tea in office.
Saturday Monitor understands that half of UTL’s fleet was also grounded in September 2016 and nearly half of the remaining fleet is currently down with various repair needs as a result of delayed servicing and repairs, a situation that has affected network maintenance which has led to increased network degradation.
“It is very clear cost-cutting strategies are only being done at lower levels as top managers enjoy foreign trips, especially to Dubai and Malta,” Mr Mafabi said, revealing that “there is a scheme to retrench some staff all in the name of cost-cutting” and that as “low cadre staff is being further squeezed, top management is busy sharing out the spoils from the ailing UTL.”

When contacted, Mr Julius Kapwepwe, a director at Uganda Debt Network, described the UTL saga as “a true reflection of how debt is slavery” and that it also represents how bad the situation is with insider trading, among several other public sector institutions. Mr Kapwepwe and other people who talked to Saturday Monitor wondered why ministry of Finance didn’t raise the red flag when things were falling apart at UTL.
“We need to beef up public accountability, including empowering the Auditor General to periodically comb through all public institutions and companies such as UTL, National Housing, Lugazi Sugar Works and others where there is public interest. Funds lost in such scams deny Ugandans service delivery, yet no one takes personal responsibility for the mismanagement and failures,” Mr Kapwepwe said.


While ministry of Finance officials and UTL managers were locked in a crisis meeting, the ministry spokesperson, Mr Jim Mugunga, said: “The ministry or government are not responsible for setting the salary structure at UTL. The company is a limited liability company.., secondly, it operates in a highly competitive sector where it’s not so uncommon for the players to hire expatriates stuff to take leadership. These people don’t come cheap as we all know.”
If UTL managers were running a sinking ship and did not deliver in accordance to the terms of their employment, then, Mr Mugunga said, “there must be mechanisms of evaluating the performance and determining their future roles in the company. In any case, the government was a minority shareholder in the company.”
Although Mr Mugunga appeared to deflect the questions to the top management, the UTL MD and the board chairman, including some select senior officials at UTL, said they were in a meeting at the ministry of Finance headquarters and, therefore, were unable to comment. By press time, the meeting to discuss the future of UTL, chaired by finance Minister Matia Kasaija, was still on-going.

Other issues

Salary advances. Whereas Mark Shoebridge has previously communicated to all staff that due to financial difficulties, the company could no longer pay salary advances (usually used by staff to pay house rent and school fees) as provided for by the HR Policy, he has continued to pay himself and his cronies various advances;
• Mark paid himself more than $18,000 (about Shs64m) in school fees (compared to his contractual entitlement of only ($6,000 or Shs21m).
• Mark also received $30,000 (more than Shs100 million) for his personal rent for the first six months next year at the rate of $5,000 (about Shs18m) per month although he is entitled to only $3,000 (about Shs11m) per month.

• Emmanuel Kasule was paid almost Shs50 million in August 2016 even before he started working with UTL in September 2016. He was paid an additional $6,000 in November before the previous one was recovered.
• Ayub Mulumba was paid Shs12 million in October 2016.
• James Wilde’s rent for the period of January to June $30,000 (at the rate of $5,000 per month) was paid in November compared to his entitlement of $2,000 per month. Previously, $15,000 had been paid for the period of October to December 2016.
The payments are in complete contrast to the company’s dire financial situation.
The shrinking network and poor services.

At the time of government takeover, Lap Green inherited a very good network with about 600 sites providing mobile, fixed line and data services. Apart from the heavily vandalised cable network, the mobile network has shrunk. This is a result of sites being closed and, or, cannibalised to be used as spares as the company cannot even afford any spares, failure to provide fuel regularly and fuel being stolen. Closing sites is going on even in areas where there high demand and where other service providers (MTN, Airtel, and others) are continuously expanding and improving their services/networks.
Non-Auditing of company accounts. For many years now, no auditing has been done on the company accounts. This is the reason why it took long to detect a fraud that went on for years where petty cash was siphoned to the tune of more than Shs1.5 billion.
Source: Nandala Mafabi petition to Parliament

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